The Riksbank’s company interviews were somewhat gloomier than expected. The economic situation is more or less unchanged since the previous report in September. This is weaker than the improvement seen in for example the NIER’s Business Tendency Survey.
As for price developments, which currently are the focal point for monetary policy, companies state that cost pressures are low and that price hikes are expected to be muted going forward. On average, companies say that prices will on average be hiked by around 1% the coming year. Thus, well below the 2%-target but in line with the Riksbank’s as well as our near term inflation forecasts.
Employment plans are less optimistic than in the September report. This is in sharp contrast to the upturn seen in NIER’s surveys. Capacity utilisation is in general low, although there are some signs of investment activity picking up.
On the positive side, companies state that risks have diminished. The risk assessment is the lowest since 2010 when the Riksbank started with company interviews. However, note that the survey was conducted 2 January to 17 January, thus mainly before the turbulence related to emerging markets.
Only 25 companies were interviewed in the January report (normally around 40 companies).
All in all, the Riksbank’s company interviews were gloomier than expected and in many respects in contrast to other surveys showing an improved sentiment. We believe that the NIER’s survey is more important for the Riksbank. Thus, the company interviews don’t change much ahead of next week’s monetary meeting, when the Riksbank is widely expected to stay on hold.
The Riksbank has conducted interviews with companies in the construction, retail, manufacturing and service sectors ahead of every Monetary Policy Report since 2007, thus three times a year. The interviews were conducted for 25 companies during the period 2 January-17 January.
Nordea