Retail trade swells as consumers eye better economic future.

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Swedish retail trade volumes increased 5.1 percent last month, compared to a year ago, as consumers are getting more upbeat about their future economic situation, the statistics office said Friday.

“Swedish retail sales continue their strong development from last year’s latest months. The growth is driven partly by the recovery of the durable goods trade from the weak sales one year ago, and partly by the generally rising optimism of Swedish households about the future”, the Swedish Retail Institute said in a statement.

Retail sales for consumables increased by 3.6 percent while retail sales for durables increased by 6.3 percent.

One of the winning industries in January was sporting and leisure goods. Supported by the snow and harsh weather, sales increased 13.3 percent.

The industries for books/paper and optical goods also show growth rates above 10 percent.

Despite growing optimism among the households the future is still hard to predict as global economic uncertainty remain high and rising national unemployment may be difficult to curb.

"The retail sector’s relatively strong rate of growth has much to thank the stimulus directed towards households. However, future challenges exist. It is likely that the households received their final tax cut for a couple of years in 2010, and starting this summer the interest rate path will be pointing up. The Swedish household’s retail budget will thus be tightened in the near future", the Swedish Retail Institute said.

The turnover for retail trade measured in current prices increased by 4.3 percent from January of 2009 to January of 2010.