The Riksbank published it’s September Business Survey on 9 October. The survey shows that, despite the economy growing at a reasonable rate, companies are generally more pessimistic about future economic developments. Specifically, it is the slowdown in growth markets, low commodity prices and tumbling investment in the energy sector, that are worrying the export industry. Manufacturing companies have noticed for some time that demand in China is not growing as strongly as before and demand continues to be weak in Brazil and Russia.
Generally, companies feel increasingly secure about growth in domestic demand. The assessment of the construction, retail and consumer-related service companies is that the risks of deterioration in the economic activity have diminished. Opinions are particularly positive in the construction sector, where demand continues to rise and the rate at which new homes are being built is very high.
The Business Survey states that there is an ongoing discussion between companies and banks about negative deposit rates. In general, companies do not need to pay to keep liquid assets in the bank but if the repo rate is cut even more, they feel that there is a major risk of the banks in Sweden starting to charge for deposits. Companies say that they are analysing how to optimise their cash flows so that they can avoid such costs in the future. Click here to download the business survey.