PUBLISHED June 28, 2026
According to the Riksbank’s May 2026 Business Survey, Sweden’s largest companies describe the current economic situation as still weak, with the Iran war introducing a fresh wave of uncertainty that threatens to delay an already prolonged recovery — but the impact so far has been more gradual than dramatic.
A Fragile Recovery Hit by Another External Shock
According to the major Swedish companies, the economic situation is still weak. Before the war in the Middle East broke out, they felt that the economy was slowly improving. The war does not seem to have significantly affected this picture. But uncertainty has increased again, which the companies say risks delaying the already prolonged recovery. The phrase circulating in executive boardrooms — “a new black swan” — captures the sentiment well: yet another unpredictable external shock arriving just as Sweden’s businesses were beginning to see light at the end of a long tunnel of weak demand, high costs, and structural adjustment.
Costs Rising, But Still Manageable
The effects of the war in the Middle East are so far considered less severe than the crises of recent years. The war and the closure of the Strait of Hormuz have so far gradually increased costs for the companies, mainly through higher oil prices. However, the situation is considered manageable for the time being. This is partly because the companies have become more resilient to various types of shock following the lessons learnt from the crises of recent years. The experience of navigating COVID-19, the 2022 energy shock, and supply chain disruptions has left Swedish business with stronger hedging strategies, more diversified sourcing, and a greater tolerance for volatility than they had before.
Manufacturing Still the Weak Link
Swedish manufacturing companies continue to face the most challenging conditions of any major sector. Demand from abroad remains subdued, particularly from Germany and other key European export markets that are themselves struggling with the energy price shock. Order books are thin, capacity utilization is below normal levels, and hiring intentions remain cautious. The survey reflects a sector that is holding on rather than actively expanding — waiting for a clearer signal that the global environment is improving before committing to investment or new headcount.
The construction sector had begun showing early signs of recovery heading into 2026, supported by improving financing conditions and rising building permits. The Iran war and associated uncertainty have now introduced a new risk to that tentative upturn. Material costs — particularly for energy-intensive inputs — are creeping up again, and some project timelines are being reviewed. The sector remains significantly below its pre-2022 peak, and a durable recovery depends heavily on continued improvement in the interest rate environment and a stabilization of global energy markets.
The construction sector had begun showing early signs of recovery heading into 2026, supported by improving financing conditions and rising building permits. The Iran war and associated uncertainty have now introduced a new risk to that tentative upturn. Material costs — particularly for energy-intensive inputs — are creeping up again, and some project timelines are being reviewed. The sector remains significantly below its pre-2022 peak, and a durable recovery depends heavily on continued improvement in the interest rate environment and a stabilization of global energy markets.
The consumer-facing sectors of the Swedish economy are in a relatively more favorable position thanks to the government’s fiscal support measures — the food VAT reduction, lower fuel taxes, and public transport subsidies — which are keeping inflation artificially suppressed and supporting household purchasing power. Retail companies report that Swedish consumers have so far not significantly changed their spending behavior in response to the war, though confidence has dipped and there is some concern that higher fuel prices and a broader deterioration in sentiment could erode spending later in the year.
The Riksbank regularly interviews Sweden’s largest companies in the manufacturing, construction and retail trade sectors, some services sector segments and employer organisations. Representatives of 41 companies, with around 230,000 employees, were interviewed via personal visits, telephone or web-based services. The interviews were conducted mainly during the period 7–19 May 2026. From 2026 onwards, the Riksbank has expanded the frequency of this survey to four times per year — published quarterly in March, June, September, and December — reflecting the central bank’s desire for more timely intelligence from the real economy as monetary policy decisions become increasingly sensitive to fast-moving geopolitical developments.
The overarching message from Sweden’s business community in May 2026 is one of cautious resilience. Companies are not panicking — they have been through worse in recent years and have learned to adapt. But the accumulation of shocks, the persistence of weak demand from key trading partners, and the return of energy price volatility are all conspiring to make the path back to normal longer and more uncertain than hoped. The “new black swan” may not capsize the ship — but it has slowed its course.
The consumer-facing sectors of the Swedish economy are in a relatively more favorable position thanks to the government’s fiscal support measures — the food VAT reduction, lower fuel taxes, and public transport subsidies — which are keeping inflation artificially suppressed and supporting household purchasing power. Retail companies report that Swedish consumers have so far not significantly changed their spending behavior in response to the war, though confidence has dipped and there is some concern that higher fuel prices and a broader deterioration in sentiment could erode spending later in the year.
The Riksbank regularly interviews Sweden’s largest companies in the manufacturing, construction and retail trade sectors, some services sector segments and employer organisations. Representatives of 41 companies, with around 230,000 employees, were interviewed via personal visits, telephone or web-based services. The interviews were conducted mainly during the period 7–19 May 2026. From 2026 onwards, the Riksbank has expanded the frequency of this survey to four times per year — published quarterly in March, June, September, and December — reflecting the central bank’s desire for more timely intelligence from the real economy as monetary policy decisions become increasingly sensitive to fast-moving geopolitical developments.
The overarching message from Sweden’s business community in May 2026 is one of cautious resilience. Companies are not panicking — they have been through worse in recent years and have learned to adapt. But the accumulation of shocks, the persistence of weak demand from key trading partners, and the return of energy price volatility are all conspiring to make the path back to normal longer and more uncertain than hoped. The “new black swan” may not capsize the ship — but it has slowed its course.
