Swedish retail sales grow below undershoot expectations, modest trend in retail sales to continue

Swedish retail sales grew on a year-on-year basis in March. The retail sales growth figure came in at 1.9 percent year-on-year, as compared with February’s year-on-year growth of 2.6 percent and consensus expectations of 3.1 percent. However, on a sequential basis, retail sales fell 0.4 percent, as compared with the February’s print of 0.3 percent and consensus expectations of 0.2 percent. The data was worse than expected. The trend in recent months continues to remain weak, while retail sales have not risen since May 2016.

The Easter break was in April this year but in March last year. This might have influenced the calendar adjusted figures. This makes the March figures more uncertain, noted Nordea Bank in a research report.

Swedish retail sales are expected to continue their modest trend. Retail sales’ short-term indicators have come out mixed. Retailers’ assessments of their sales situation are muted, but consumer sentiment continues to be comparatively high. In all, households’ financial conditions are likely to remain favourable in the future.

Meanwhile, employment is likely to further rise and mortgage rates are expected to remain low. But stagnant house prices might exert some downward pressure on retail sales, added Nordea Bank.