Continued Slowdown in Service Price Growth in the Second Quarter of 2023 in Sweden

The Swedish Consumer Agency (SCB) has released the latest statistics on service prices, indicating a gradual deceleration in growth during the second quarter of 2023. The Service Price Index (TPI) recorded a 0.6% increase compared to the first quarter of 2023. However, in comparison to the same period in 2022, service prices experienced a more substantial 4.1% rise, showing signs of moderating inflation.

Key Points:

  • The Service Price Index (TPI) rose by 0.6% in the second quarter of 2023, a slower pace than the 1.2% growth observed in the first quarter of the same year.
  • Over the past quarter, several service groups contributed to the quarter-on-quarter TPI change. Notable contributors included hotel services, bar and restaurant services, other land transport (passenger traffic), architectural and technical consulting services, as well as rental and leasing services. Additionally, services related to film, video, TV programs, audio recordings, and phonogram publishing also made positive contributions to the quarter-on-quarter change.
  • However, the TPI increase was dampened by lower prices for software publishing services, which had a negative impact of -0.2 percentage points. Furthermore, data processing services and support services for transport each contributed -0.1 percentage points to the TPI decline.

Major Contributions to Total Change, Quarter 1, 2023 – Quarter 2, 2023:

  • Other land transport, passenger traffic: +0.1 percentage points
  • Support services for transport: -0.1 percentage points
  • Hotel services: +0.1 percentage points
  • Bar and restaurant services: +0.1 percentage points
  • Software publishing services: -0.2 percentage points
  • Services related to film, video, TV programs, audio recordings, and phonogram publishing: +0.1 percentage points
  • Data processing services: -0.1 percentage points
  • Architectural and technical consulting services: +0.1 percentage points
  • Rental and leasing services: +0.1 percentage points

Annual Growth:

  • The annual service price growth rate for the second quarter of 2023 remained positive at 4.1%. However, it showed a decline compared to the previous quarter’s annual growth rate of 5.9%.
  • The positive annual growth rate was driven by significant contributions from information and communication services, which contributed 1.0 percentage point. Fast property services added 0.8 percentage points, while services in the legal, economic, and technical sectors, as well as rental and other support services, each contributed 0.7 percentage points. Hotel and restaurant services contributed 0.5 percentage points, transportation and storage services added 0.3 percentage points, and other services contributed 0.1 percentage points.

The recent data indicates a continued moderation in service price inflation, contributing to a more stable economic environment in Sweden during the second quarter of 2023. Policymakers and economists will closely monitor these trends to ensure sustainable economic growth and manage any potential impacts on consumer spending and business investment.