The Riksbank’s Business Survey: “No strong wind in our sails”
Press release Economic activity is weak in most parts of the economy and largely unchanged compared with the previous survey in the autumn. Companies believe that the situation will be marginally better in six months' time, but it is expected to take longer than that for there to be a tangible improvement. The majority of companies estimate that they will be affected to a small extent if the United States introduces import tariffs. But they also consider it difficult to predict the consequences, because there is so much uncertainty about how the tariffs might be designed. This is revealed in the Riksbank's Business Survey in February.
“Things are moving slowly out there”
While the grocery sector is experiencing stable sales growth, the durable goods and hospitality sectors are generally slower. It is therefore common to use various promotional offers to entice households to buy. Companies are still waiting for interest rate cuts and real wage increases to boost consumption. "At some point, consumers will start shopping", says a representative of the retail trade sector.
Manufacturing industry: “The current situation is challenging”
Demand is weak in large parts of the manufacturing industry, which is partly linked to challenges in the European motor vehicle industry. Admittedly, some manufacturing companies are now a little more optimistic about the future than they were last autumn. However, they point out that the change in economic activity is not expected to come soon or be strong, and that it is only towards the end of the year that an improvement will be seen. For the construction sector as a whole, the situation is relatively unchanged. Demand for new housing remains weak, while demand for civil engineering and infrastructure remains strong.
“There is no appetite for price increases, but we have no choice”
Grocery retailers and restaurants are increasing their selling prices, due to higher purchase costs for some commodities. However, the relatively weak demand makes it more difficult for companies in the durable goods sector and other sectors to raise their prices. Although there are plans to increase prices in the longer term, this will largely depend on how demand develops.
Import tariffs: “No one knows what will happen”
The February Business Survey included questions about import tariffs and their impact on businesses. The announcement of import tariffs in the United States and possible retaliatory measures by the EU add to uncertainty about the outlook for international trade and are seen by many companies as a risk to the economic recovery. The majority of companies estimate that they will be affected to a small extent. But it is difficult to predict the consequences, as it is not known what form the possible tariffs will take. Companies that expect to be significantly affected by the tariffs anticipate having to raise their prices to compensate for them.
About the Business Survey
The Riksbank regularly interviews Sweden’s largest companies in the manufacturing, construction and retail trade sectors and some services sector segments. Representatives of 44 companies and trade associations, with around 300,000 employees, were interviewed via personal visits, telephone or web-based services. The survey was conducted mainly during the period 31 January to 7 February.
The results of the interviews are reported in the Riksbank’s Business Survey.
The quotations above are from the interviews.