Economic Tendency Survey August 2019

Economic Tendency Indicator falls for a fourth month

The Economic Tendency Indicator fell for the fourth month in a row from 96.4 in July to 94.9 in August and points to weaker sentiment than normal among both firms and consumers. The main reason for the decrease was a further decline in manufacturing confidence, which has dropped more than 25 points in the past year.

The confidence indicator for the manufacturing industry dipped to 94.8 in August and shows a relatively weak situation. Firms’ view of the current size of their order books and their production plans for the next three months both contributed to the fall. However, while production plans are well below normal, firms’ assessment of their order books is more or less in line with the historical average.

The confidence indicator for the building and civil engineering industry also fell in August after rising by the same amount in July, and is now back in line with the historical average, signalling a normal situation in the industry. The decrease was due to firms revising down their employment plans, which now point to a largely unchanged workforce over the next three months.

The confidence indicator for the retail trade fell a point in August but is still slightly above the historical average. The change was mainly a result of increased dissatisfaction with stocks.

The indicator for the service sector edged up in August but remains below the historical average. The improvement was due to slightly stronger signals from firms about how their operations have developed in recent months.

The consumer confidence indicator dropped 2.5 points in August after gaining the same amount in July. The new level of 94.0 indicates relatively weak sentiment. The decrease was largely on account of consumers becoming even more pessimistic about the economy.