SEB’s Financial Officers’ survey, addressed to more than 100 of the largest companies in Sweden and Norway, shows that respondents have become much more pessimistic this summer.
SEB’s Financial Officers Index for Sweden published today stands at 55, down from 62 in May. SEB’s Financial Officers Index for Norway, published biannually, stands at 55, down from 64 in February.
“Concerns regarding demand have increased significantly among financial officers in both Sweden and Norway, say Ebba Lindahl, head of credit research at SEB, and credit analyst Henrik Blymke. Far fewer companies now plan to employ more staff domestically during the next six months while profit expectations for 2011 are declining despite generally solid Q2 earnings reports. As might have been expected, Asia is regarded as most likely to generate growth going forward. In Norway, the lack of a suitably qualified workforce remains a more urgent concern for respondents compared to their Swedish counterparts.
“Another sign of decreasing business confidence in Sweden is the fact that the share of officers expecting to raise prices in the next six months declined to 47% from 65% in May and 71% in February. Conversely, Norwegian financial officers believe their companies are better placed to raise prices now than in February, at 57% compared with 40% six months ago,” says Blymke.
“Although financial positions remain strong according to both Swedish and Norwegian officers, they appear to be weakening, he adds. Only 59% of Swedish officers now rank their position as either strong or very strong, compared to 86% in May. The corresponding share in Norway is 69%, compared to 84% in February. At the same time, Swedish and Norwegian officers note that banks have become less willing to lend.”
(CM)