Sweden's Economic Confidence Reaches Highest Level Since 2022 as Consumer Sentiment Improves

Dubai | EcoPulse24

Business Confidence Climbs to Highest Level in Nearly Two Years

Sweden's economic confidence strengthened further in June, with the Economic Tendency Indicator rising to 101.7, up from a revised 99.9 in May, marking its highest reading since July 2022.

The improvement was driven primarily by the manufacturing sector, where confidence climbed to 105.1, its strongest level since December 2022.

According to the latest survey, manufacturers reported healthier order books in both domestic and export markets, while fewer companies indicated that inventories remained above normal levels.

Services also improved modestly, with confidence edging higher to 101.9, supported by stronger activity in professional services.

Construction, however, weakened slightly as firms revised employment expectations lower, while retail confidence eased from elevated levels but remained the strongest-performing sector overall.

Business Sentiment Remains Above Long-Term Average

Separate survey data showed Sweden's Business Confidence Indicator held steady at 103.6 in June, remaining comfortably above the long-term average of 100, indicating that companies continue to view business conditions more positively than normal.

The survey showed demand conditions improved modestly compared with May, although they remained below historical norms. At the same time, firms reported slightly weaker employment conditions over the past three months and expect staffing levels to remain broadly unchanged during the next quarter.

Companies also continued to anticipate higher selling prices over the coming three months, although pricing expectations eased compared with the previous survey, suggesting inflationary pressures may be moderating gradually.

While businesses remained more dissatisfied with overall demand than usual, sentiment in the manufacturing and trade sectors was broadly consistent with long-term averages.

Swedish Consumers Turn More Optimistic About the Economy

Separate data showed Sweden's Consumer Confidence Indicator increased to 93.6 in June from 92.8 the previous month.

The improvement reflected growing optimism about Sweden's economic outlook over both the past year and the year ahead.

However, households remained considerably more cautious regarding their own financial situation.

Consumers reported little change in their willingness to make major purchases, while expectations that unemployment will increase over the next twelve months continued to rise.

Households also maintained relatively strong saving intentions and continued to delay purchases of durable goods.

Inflation Expectations Continue to Moderate

Consumers' inflation expectations for the coming 12 months eased to 7.0%, while households expect variable mortgage rates to average approximately 3.7% over the next one to two years and 3.9% over the following five years.

Business pricing intentions also moderated across most sectors, although manufacturers remained more inclined than other industries to increase prices.

EcoPulse24 Data Snapshot

EcoPulse24 Analysis

June's business surveys present a picture of a gradually improving economy. The Economic Tendency Indicator reached its highest level since July 2022, while the Business Confidence Indicator remained above its long-term average, suggesting Swedish companies continue to report healthier operating conditions despite demand that has yet to fully normalize. Manufacturing remains the primary driver of the recovery, supported by stronger domestic and export order books and easing inventory pressures.

Household sentiment also improved, but consumer confidence remains below its historical norm, highlighting a divergence between perceptions of the broader economy and personal financial conditions. While Swedes have become more optimistic about the national economic outlook, many households remain cautious about discretionary spending, continue to build savings, and still expect unemployment to rise over the coming year.

The easing of inflation expectations and softer pricing intentions across most industries indicate that price pressures may be gradually moderating. However, manufacturers continue to signal relatively elevated pricing plans, suggesting inflationary pressures have not disappeared entirely.

Taken together, the latest surveys suggest Sweden's recovery is becoming increasingly business-led, while consumer demand remains more restrained. Whether stronger corporate confidence ultimately translates into a broader household recovery will likely depend on future labour market conditions, inflation dynamics, and interest rate developments.