Manufacturing industry still strong

The Economic Tendency Indicator fell for a second month from 107.9 in February to 106.6 in March. This was due to less optimistic firms, as consumer confidence improved slightly. Despite the decrease, the Economic Tendency Indicator still points to stronger economic growth than normal.

Firms in the manufacturing industry reported healthy growth in domestic orders in recent months, and their production plans point to a strong performance over the next three months. Export orders have increased overall, but less and less quickly in recent months, which can be explained mainly by weakness in the electronics and pharmaceutical industries.

Construction firms reported further very strong growth, and expectations for orders and activity are much higher than normal. At the same time, there is a hint of a slight downtrend in the industry’s optimistic recruitment plans since the autumn. The same applies to expectations for tender prices.

The confidence indicator for the retail trade declined for a third successive month but is still above the historical average and so points to a stronger situation than normal. Optimism in the service industry has also declined over the past three months and is now only marginally above the historical norm.

Indicators

Note. The standardisation of the Economic Tendency Indicator means that it cannot be calculated as a weighted mean of the levels of the sector confidence indicators.

The indicators are revised each month when the time series are seasonally adjusted. The values will often then move slightly up or down.

The situation is: ++ very strong, + strong, = normal, - weak, -- very weak.

The confidence indicator for the total industry is obtained by weighting the confidence indicators for building and civil engineering, manufacturing, the retail trade and the private service sector on the basis of the number of employees in the population. These weights are different to those used in the calculation of the Economic Tendency Indicator.

The confidence indicator for the private service sector has been estimated for January 1996 to November 2001 on the basis of quarterly series for a limited number of service industries.

Household expectations on inflation and interest rate