Sweden's Riksbank has published its May 2026 Business Survey, based on interviews with major companies, showing that economic conditions remain weak and the recovery prolonged even though firms had seen gradual improvement before the war in the Middle East. Companies reported that the conflict and the closure of the Strait of Hormuz have so far raised costs mainly through higher oil prices, but the effects remain manageable and have not materially changed the near term activity picture. Most firms plan to raise selling prices over the coming year, but only modestly for now, as uncertainty over costs and demand makes the extent of pass-through unclear. Firms attributed the more limited impact versus recent crises to more resilient supply chains, larger inventories and wider use of contractual clauses that allow unexpected transport, energy and material costs to be renegotiated or passed through. Conditions nevertheless vary sharply by sector: retail and hospitality are improving gradually as households spend a little more but stay price conscious, with non-durable goods sales helped by the temporary reduction in food VAT, while business-facing demand remains strong in data centres, defence, aviation and mining, weak in wood and pulp because housing construction has not restarted, and slightly better in automotive on stronger European demand. Companies expect cost pressures to become clearer in autumn 2026 and early 2027, and the Business Survey indicator fell back to just below its historical average in May.

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