Swedish economy being assessed as breaking sharply


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Thursday, 25 August 2011
The Swedish economy is now slowing down sharply if analysis presented by the Swedish institute for Economic research, NIER's is to be believed.  The NIER's latest barometer shows that both industry and households are preparing for a much tougher time ahead.

The confidence indicator for the economy fell in August to 9 from 16 in July. For the past six months, the indicator had dropped 20 units.
Despite the sharp decline in August, it is reported to still be at same level as the historical average. All business sectors contributed to the result.

"Industrial activity has slowed down markedly in recent months. Order growth has virtually stagnated and both production and employment growth has slowed considerably, "writes NIER.

In the construction and manufacturing industries, the indicators remain above their historical averages. The private service sector has it tougher and in the retail situation is described as "very weak".
Among households, the pessimism has increased sharply. The confidence indicator, which weighs confidence in personal finances and the economy, fell in August to its lowest level in two years.
"Consumer confidence in the current situation in the Swedish economy has deteriorated sharply since July, and has now fallen sharply for two consecutive months, "writes NIER.

Nordea notes in a comment that household mood tends to vary with stock market performance.
"Today's figures suggest the weak private consumption and weak growth in retail sales in the third quarter,” bank indicated.

Household inflation expectations have also fallen sharply. Prices are now expected to rise by 2.5 percent the next year, compared with 2.9 percent in July and 3.3 percent in June.
By Team

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