Den svenske økonomi har forbedret sig markant, men på det seneste er der sker en vis afmatning. Det er to skridt frem og et tilbage, skriver Handelsbanken, som venter en bugtet vej fremover.
Two steps forward, one step back – October sentiment indicators preview
• Further upside to the Manufacturing Confidence Indicator, or will European double-dip fears take their toll?
• Full quarterly batch of indicators closely watched by the Riksbank, not least low resource utilisation
Our GDP forecast is consistent with a further pickup in economic sentiment ahead, but expect a winding road to recovery.
The Consumer Confidence Indicator has been out of sync with consumption outcomes this year, as the spread of COVID-19 and related restrictions shackled consumption more than motivated by mere economic forces. Expect the CCI to gradually rise during the recovery from the crisis, restoring its tight bond with consumption trends.
After last month’s boost, one could be forgiven for asking if the NIER survey manufacturing confidence indicator has risen too high. Are we due a backlash? For one thing, the PMI, which normally leads the MCI by a couple of months, is not as positive. Secondly, timely data from export markets are not advancing as fast as they did some months ago, with fear of a European double dip now starting to spread.
However, looking closer at the two surveys, comparing only the similar components, we find that the PMI might actually suggest some further upside to the NIER survey MCI.
Retail sector confidence has been surprisingly strong, according to the NIER survey, more so than the Swedish Trade Federation indicator, for instance. And there is an explanation.
The relatively strong retail sector confidence indicator is mostly driven by firms’ assessment of inventories, which are on average seen as too low, lifting the indicator. This unusual situation cannot last, and if retail sales do not pick up, the overall indicator will inevitably fall back.
The upcoming quarterly edition of the NIER survey also offers the next set of prints for many of the most important resource-utilisation indicators. Positive tendencies in other economic data could signal an upcoming increase in resource utilisation, but on the other hand the recovery in the economy has started to sputter after the initial rebound.
Consumers are yet to sense the cooling inflation portrayed in the CPI, but firms’ inflation expectations are less comforting for the Riksbank. This data, with proven forward-looking properties, is now printing close to lows. If the Q3 NIER survey does not show another uptick, it might spell trouble for inflation, and hence the Riksbank, over the coming year.
