(Bloomberg) -- A closely-watched indicator of sentiment in the Swedish economy showed that businesses have seen their prospects worsen, dampening hopes of a recovery, even as consumers become steadily more upbeat.
The economic tendency indicator fell to 93.6 from revised 94.6 in the previous month, according to a report from the National Institute of Economic Research published Wednesday. While consumer confidence strengthened for a 13th consecutive month to exceed 100 for the first time in almost three years, an indicator of sentiment in the manufacturing sector fell to 91.8, its lowest level since June 2020.
The survey is the last major piece of a puzzle that the Riksbank will be studying next week when officials gather to make a decision that is unusually uncertain. Analysts are divided between those who expect the central bank to continue taking its benchmark rate lower in quarter-point steps and others who believe it will double that pace in an effort to aid a listless economy.
Other data published this week also indicate that an economic recovery in the largest Nordic country remains elusive, as a preliminary estimate showed that output continued to shrink in the third quarter, and businesses queried by the Riksbank became less optimistic about their prospects.
In a comment on Wednesday’s report, Danske Bank A/S’s Swedish chief economist Michael Grahn said it adds to the case for a half-point cut by the Riksbank next week, as the indicator of manufacturers’ order intake from abroad fell to the lowest level since August 2020.
--With assistance from Simbarashe Gumbo.
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