Swedish September Tendency Survey: Optimistic households

Sweden’s economy has normalized, with improving confidence and price pressures likely to support two further Riksbank rate hikes.

• The headline ESI rose from 105.1 in August to 107.1 in September, indicating stronger-than-normal sentiment and broadly matching Nordea’s 3% GDP growth forecast for the year.
• The business indicator increased from 107.5 to 109.3, led by construction at 102.9 and services at 107.1, the sector’s highest level since 2022.
• Retail sentiment declined slightly from a high level, while manufacturing remained stronger than normal and reported higher production plans.
• Household confidence reached 102.2, its highest level since 2021 and its first return to normal since November 2024, as perceptions of household finances and the economy improved.
• Employment plans reached their highest level since 2022, with positive intentions in every sector, although construction drove much of the monthly increase and remains volatile.
• Companies’ price plans were higher or much higher than normal across all sectors, adding to concerns about renewed inflation pressure.

Takeaway: The combination of solid growth, improving labour-market expectations and elevated price plans supports a hike to 2.0% in November and another 25-basis-point increase in February, although the construction-led employment improvement is volatile.