Upside for the industry this fall?

An autumn awaits us that will likely bring a lot of challenges for the Swedish economy, the development of trade and not least our own industry. APPLiAnytt has compiled some of the statements from the National Institute of Economic Research, the Swedish Chamber of Commerce and two of our member companies as an indication of how our industry will be affected.

KI: Economic outlook has deteriorated during the summer

The Swedish economy performed surprisingly well in the second quarter of this year. But the outlook for the future has become bleaker over the summer. The National Institute of Economic Research's (NIER) latest forecast update on the Swedish economy shows that pressured Swedish households will reduce consumption this autumn and winter, which will contribute to the Swedish economy entering a recession next year, according to the NIER's presentation at the press conference last week. Below, we highlight some specific points from the presentation to keep an eye on.

High energy prices will continue to pressure Swedish consumers
GDP growth revised down to +0.5 percent in 2023 from +2.4 percent this year
Unemployment will bottom out at 7.7 percent this year and rise next year
Inflation continues to rise, peaking at nearly 10 percent at the turn of the year

The Riksbank will also continue on its current path of interest rate hikes in order to curb inflation and high inflation expectations. By the end of 2022, the repo rate is expected to have been raised to 2 percent. Inflation will fall back quickly next year, and the Riksbank will then leave the interest rate unchanged.

The full presentation from KI's press conference on August 10th can be found here. here.

Trade particularly vulnerable

The Swedish Trade Association publishes a trade barometer every month, where they measure, among other things, Swedish traders' confidence in the future. The measurement for July shows that the anxiety persists - for the fourth month in a row. The future indicator, which has a neutral value of 100, shows 87.7. This means that Swedish traders' confidence in the future remains low, even though it is an increase of one percent since last month's measurement.

High layers in the luxury goods trade

The July trade barometer also presents figures for retailers' inventories. Notably, the non-durable goods trade reports that their inventories need to be reduced, while the situation is the opposite in the grocery and wholesale trade, where more people need to replenish their inventories.

In March, 30 percent of non-durable goods retailers responded that they needed to increase inventories, while only 12 percent had the same need in June. In e-commerce, the trend was the same, with more people than in March needing to reduce their inventories, albeit to a somewhat lesser extent than in non-durable goods.

– The essential conclusion we can draw from all these figures is that the weak situation in retail continues. Retailers have a wait-and-see attitude towards the next three months. Expectations for future sales are falling rapidly. Autumn and winter will bring challenges for large parts of the segment, says Sofia Larsen, CEO of Svensk Handel in their press release.

You can find the entire Handelsbarometer here.

/Kent Oderrud

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