Unchanged sentiment but more firms expect price increases ahead

Firms’ price plans increased in all sectors of the business sector except manufacturing, where they were unchanged. In all sectors except the services sector, significantly more firms than normal expect to raise selling prices, although price plans in the services sector are also above normal. Price plans measure the difference between the proportion of firms expecting higher prices and the proportion expecting lower prices. They therefore do not measure the size of the expected price increases.

Unlike in April, firms in manufacturing report that production volume has increased over the past three months. Production plans are unchanged compared with April and point to production increases in line with the historical average.

A large proportion of construction firms expect order books to increase over the next three months. However, firms’ assessment of the current size of their order books remains more negative than normal.

The confidence indicator for trade increased marginally and continues to signal a stronger-than-normal situation. The high level of the indicator is explained primarily by the fact that few firms report having large inventories. The other two questions included in the indicator – firms’ assessment of sales volume over the past three months and expectations for the coming three months – are also stronger than normal.

Service sector firms report, to a normal extent, that demand has increased over the past three months. However, their assessment of the volume of outstanding business remains more negative than normal.

After two months of decline, the consumer confidence indicator increased marginally in May, but sentiment remains weaker than normal. All five questions included in the consumer confidence indicator are below their historical averages. Consumers are most pessimistic about their expectations regarding their own financial situation over the next twelve months and their attitude towards major purchases.