Swedish optimism on economy grows
TT/The Local/vt · 25 Nov 2010, 15:15
Published: 25 Nov 2010 15:15 GMT+01:00
The National Institute of Economic Research's (Konjunkturinstitutet, KI) Economic Tendency Survey, which reveals the mood of the country regarding the economy, rose nearly four points to 114.1 this month from 110.3 in October, on a par with the record highs recorded in the autumn of 2000 and spring of 2007.
All sectors of the economy contributed to the indicator's lift. However, the outlook of households remained bleak about the future.
The increase in the measurement was primarily due to solid gains for the indicator in building and construction activity, as well as the private service sector.
"The confidence indicators for the construction industry and the private service sector in particular rose considerably, 10 and 15 points respectively," Roger Knudsen, head of the Business Tendency Survey division at KI, said in a statement on Thursday.
He added that the indicators for the manufacturing industry and the retail trade rose more moderately at three and two points respectively during the period.
Separately, the Consumer Confidence Indicator fell further in November, but only by a fraction of a point, meaning the indicator remains considerably above the historic average. The measure dropped to 22.6 from 23.4, slightly larger than expected, according to a Reuters poll, following a sharp decline in October.
The perception of Swedish households in November of their own finances was slightly more positive than the previous month, but in terms of expectations for the next year, the outlook has deteriorated.
Consumer confidence in the Swedish economy has also worsened to a degree, a process that began in September. All the same, the attitude towards the Swedish economy is more positive than normal, according to KI.
At the same time, household inflation expectations rose compared with October by 0.7 percentage points to 3.2 percent over the next year. Wages are expected to increase by 2.9 percent over the next year.
Households estimated the variable mortgage rate estimated households would be 3.5 percent over the next year, compared with 3.4 percent in October.
As a result of several positive indicators in the Swedish economy, several economic observers are anticipating even higher GDP growth than earlier predictions.
Swedbank wrote in a monthly briefing that it has increased its latest forecast from the autumn. On Wednesday, SEB also increased its growth forecast to 5 percent this year.
According to Reuters on Thursday, KI director Mats Dillén said that growth this year is expected to reach closer to 5 percent. In its September forecast, KI predicted growth of 4.3 percent in 2010.