Sweden Economic Tendency Indicator Drops to 5-Month Low

Sweden’s Economic Tendency Indicator edged up to 99.9 in March 2026 from a revised 99.7 in February, still pointing to sentiment in line with normal conditions. Business confidence remained broadly stable, with all sectors at typical levels except construction, where sentiment strengthened further to above normal, supported by more optimistic employment plans. Manufacturing sentiment also improved, mainly driven by stronger production expectations. In contrast, retail trade weakened sharply, reflecting downgraded sales expectations and a softer view of recent activity, while confidence in the services sector also declined. Consumer sentiment remained below normal, as more pessimistic expectations for the Swedish economy and household finances, along with caution toward major purchases, continued to weigh. Firms expect to raise selling prices at a normal pace, though retail pricing plans remain subdued due to expected price cuts following the VAT reduction on food.

Sweden’s Economic Tendency Indicator declined to 100.1 in February 2026, the lowest level since late October, down from 102.9 in January. Manufacturing softened mainly due to subdued production plans that fell below historical averages, although relatively low finished-goods inventories provided some support. Confidence in both the trade and service sectors also weakened, with trade sentiment pressured by lower sales volumes over the past three months, partly offset by improved expectations for future sales. In the service sector, weaker recent activity and demand drove the decline. In contrast, construction confidence improved, supported by more optimistic hiring plans and a less negative assessment of order books. Consumer confidence also strengthened, reflecting a more positive view of household finances and the Swedish economy compared with a year earlier, although sentiment remained below normal levels.

Sweden’s Economic Tendency Indicator fell to 103 in January 2026 from 103.7 in December, halting six months of improvement, but it remains above normal. Construction confidence recorded the sharpest decline, driven by more pessimistic employment plans, while order books were stable. Consumer sentiment fell marginally, with households cautious about finances but neutral on the overall economy. Trade confidence eased slightly due to weaker past and expected sales volumes, partly offset by favorable inventory views, remaining the strongest sector. Service-sector sentiment declined modestly on a less optimistic demand outlook, with recent business activity steady. Manufacturing sentiment stayed strong, slightly dampened by cautious order book assessments, while sales expectations for the coming three months improved and inventories were unchanged. Firms reported normal past price rises and expect above-average increases ahead.