Swedish economic sentiment indicator rises in April, suggests strong growth

The Swedish economic sentiment indicator, which covers firms and households, rose in the month of April and indicates solid growth. The overall economic indicator, ESI, rose to 110.4 from 108.4. Consensus expectations were for the indicator to have dropped to 107.5. Consumer rebounded in the manufacturing industry and in the construction sector. Confidence in the retail sector and the private service sector dropped.

Swedish consumer sentiment dropped a bit to 100.3 from 101.5. It came in below consensus expectations of 101.5. Order intake in manufacturing is less positive than the overall confidence within the manufacturing industry. Sentiment in the construction sector rose to 112.2. But the outlook for the construction market a year ahead continued to be gloomy, underpinning the view of declining housing investments the coming year.

Companies’ employment plans in the business sector continued to be high. Labor shortage in the total business sector rose to the same level as the peak seen in the third quarter of 2017. Consumers’ inflation expectations remained unchanged at 2.9 percent.

Overall, the ESI indicator appears slightly better than expected, which implied that GDP growth has held up well in early 2018, noted Nordea Bank in a research report. But the overall indicator appears a bit better than the details convey.

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