Middle East war risks delaying Sweden's economic recovery

The survey finds the economic situation remains weak, with the war in the Middle East increasing uncertainty.

While the immediate effects are less severe than previous crises, mainly due to higher oil prices and supply chain disruptions, companies are more resilient.

Lessons from recent crises have led to more secure supply chains and diversified sourcing.

However, the longer the conflict lasts, the greater the impact is expected to be, with some costs remaining elevated even after a resolution.

Companies intend to increase selling prices in the coming year, but the extent to which higher costs will be passed on to consumers is uncertain, depending on cost and demand developments.

One business leader noted, "We are managing it, but at a higher cost today, and you can't manage that higher cost in the long term.

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The economic situation varies significantly across sectors.

Trade and hospitality are gradually improving as households increase spending, albeit remaining price-conscious.

Non-durable goods see increased sales volumes, partly due to a temporary reduction in food VAT.

Conversely, the wood and pulp industry continues to struggle due to weak new housing construction.

However, sectors like defence, data centres, aviation, and mining experience strong demand.

The automotive industry shows cautious optimism with improved European demand.

The labor market remains cool, with companies generally holding off on recruitment and staff cuts, though demand for labor is high in growing industries.

A staffing firm noted the "very fragmented picture" of demand.