Swedish household consumption grows for fourth straight month in November

Swedish household consumption indicated sound growth in November, whereas the trend for business sector production was sluggish. Household consumption in Sweden rose 0.3 percent on a sequential basis, whereas on a year-on-year basis it grew 3.3 percent in November. Consumption has grown for four straight months and is on a healthy upward trend.

“We and the Riksbank see household consumption at 2.2 percent for FY 2016. The monthly indicator has overestimated consumption growth for Q1-Q3 2016. The monthly readings nevertheless point to some upside risks”, said Nordea Bank in a research report.

Elsewhere, figures indicated that business sector production rose 0.4 percent sequentially and 2.8 percent year-on-year. Production has fallen and has been softer than expected in recent months. On average, production in the business sector for October and November rose 2.7 percent year-on-year, which is quite lower than the 5 percent in GDP growth showed by the NIER’s Economic Sentiment Indicator.

“Figures are a bit mixed for Q4, but the Riksbank’s call (and ours) for Q4 GDP at 0.7 percent q/q and 2.2 percent y/y is definitely within reach”, noted Nordea Bank.

Meanwhile, construction sector production rose slightly on a sequential basis in November, whereas the year-on-year figure dropped, consistent with indicators.