Consumer confidence climbs further

The Economic Tendency Indicator, which measures business and consumer confidence, rose from 102.9 in September to 106.1 in October, a level that points to stronger economic growth than normal. Consumer confidence improved markedly for a second month. In the business sector, it was mainly manufacturing and retailing that were behind the increase.

The micro index, which summarises consumers’ assessment of their personal finances, rose sharply for a second successive month to 109.5 in October, its highest since 2007. An increase in the share of consumers who think now is a good time to purchase durable goods made a major contribution to the rise in the index.

Manufacturers’ overall view of their order books has improved and is slightly above the historical average. Firms expect to increase their production capacity in the coming months and have revised their production plans up sharply.

Firms in the building and civil engineering industry reported stronger order books and increased activity. Employee numbers are also reported to have increased in recent months, but a majority of firms still cite labour shortages as the main factor currently limiting production.

Sales expectations in the retail trade remain relatively optimistic. Recruitment plans have been revised up and signal relatively strong employment growth in retailing in the coming months.

The share of firms in the service sector that consider labour shortages the main factor currently limiting their activity increased sharply to its highest level since the question was introduced in early 2003.

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