Swedish economic confidence index rises further in October

The Swedish Economic Sentiment Indicator rose further in the month of October, suggesting a solid rebound before the second wave of COVID-19 in Europe. The Economic Sentiment Indicator rose to 96.3. The consumer sentiment rose to 90. Sentiment rebounded in all business sectors. Manufacturing industry and retailers are most optimistic with confidence indicators well above normal. The index for export orders rebounded a bit, but is still less positive than the PMI.

Employment plans rose highlighting that the situation on the labor market is rebounding. Labor shortage is lagging and dropped in the third quarter. Households’ inflation expectations were greatly unchanged at decent levels. Retailers price plans rose, which is surprising given the stronger SEK, said Nordea Bank in a research report.

Overall, sentiment was resilient up to and including the first part of October, yet another sign of a solid rebound in the Swedish economy.

“However, there have been bad news about the virus situation in Sweden and other parts of Europe in recent weeks, which will probably weigh on sentiment in the coming months. Thus, the recovery will probably lose steam going forward”, added Nordea Bank.