Economic Tendency Survey July 2017
Major labour shortages in the business sector
The Economic Tendency Indicator edged up from 112.2 in June to 112.4 in July and continues to signal very positive sentiment in the economy. All of the business indicators show a stronger or much stronger situation than normal, the most optimistic sector being manufacturing. The consumer confidence indicator fell slightly but remains above the historical average.
The manufacturing industry continues to report a much stronger situation than normal, with the confidence indicator rising slightly to 120.3 in July from 119.9 in June. Firms’ overall assessment of their order books is the most positive yet recorded. On the other hand, around four out of ten firms report shortages of senior technical staff, which is more than at any time in the past 30 years.
The confidence indicator for the building and civil engineering industry climbed marginally in July and once again shows a very strong situation. Employment is reported to have increased in recent months, but a very high proportion of firms again cite labour shortages as the main factor currently limiting production.
The confidence indicator for the retail trade fell 0.8 points due to slightly greater dissatisfaction with current stocks of goods. On the other hand, retailers report a favourable sales situation, and expectations remain optimistic.
The confidence indicator for the service sector gained 0.6 points in July and points to a stronger situation than normal. Despite strong employment growth, firms report very considerable staff shortages, the likes of which were last seen back in 2007. The most acute shortage is reported among architects and IT consultants.
Economic Tendency Indicator
Building and civil engineering
Private service sectors
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
Expected inflation 12 months ahead, mean excluding extreme values (percent)
Expected inflation 12 months ahead, mean all answers (percent)
Expected inflation 12 months ahead, median (percent)
Interest rate expectation, mean excluding extreme values
1 year ahead
2 years ahead
5 years ahead