The Riksbank’s Business Survey: Bargain hunting intensifies

“The picture of the economy is divided”

The manufacturing sector in general, and the export industry in particular, state that demand is strong, there are plenty of orders and the production rate remains high. Profitability is good and is also reinforced by the weak krona. Over the past year, the manufacturing sector has been prepared for a slowdown in economic activity, and has been surprised that it has not yet happened.

For the retail trade, however, demand is weaker than normal. High inflation has weakened households' finances and sales volumes are declining. It is also clear that households are increasingly looking for cheaper alternatives and/or choosing not to buy certain goods, which further impairs the profitability of the sector. The cost increases continue to be a concern for the retail trade, which experiences increased purchasing costs when the krona is weak.  

The construction industry is changing its production

For the construction industry, the sharp fall in demand for new housing has led to a rapid changeover to other types of construction, particularly community buildings and infrastructure. The larger construction companies have thus managed to reallocate their resources and have so far avoided major staff reductions. However, small companies in the construction industry, which are often less diversified, are having a more difficult time.

“We will try to increase prices if possible”

The division in economic activity is also reflected in companies' pricing plans. The manufacturing sector, which previously raised its prices quickly and rapidly, now states that cost pressures have declined, and that it is not planning to raise sales prices to the same extent as before. On the other hand, the retail trade plans to continue raising sales prices to compensate for the increased costs and declining profitability. A respondent in the retail trade says: “We will try to increase prices if possible.”