Economic Tendency Survey December 2021

Economic Tendency Indicator still strong but consumers increasingly subdued

The Economic Tendency Indicator edged down in December from 117.6 to 117.1. It remains very high by historical standards, however, and shows much stronger sentiment in the economy than normal. Manufacturing was the only sector where confidence did not deteriorate.

The confidence indicator for the manufacturing industry climbed 1 point to 127.3. The increase was due primarily to firms’ view of their order books. Expectations for future production, however, are less optimistic than before.

The confidence indicator for the building and civil engineering industry dropped 1.2 points to 107.4. This was mainly a result of firms being less positive about their order books, but their employment plans are also slightly less optimistic.

The confidence indicator for the retail trade fell 4.8 points. Although this is the sector where sentiment deteriorated the most in December, the indicator still points to a much stronger situation than normal. All of the questions in the indicator contributed to the fall, but it was due especially to fewer firms expecting sales volumes to rise over the next three months.

The confidence indicator for the service sector dropped 1.4 points to 109.5. As in most of the other sectors, less positive expectations were the reason for the decline. In this case, it was expectations for demand in the coming months that deteriorated.

The consumer confidence indicator fell slightly further in December and now shows slightly weaker sentiment than normal. Households remain very negative about whether it is a good time to make major purchases, which is pulling down the indicator.