Economic Tendency Survey May 2022

Consumers downbeat, but businesses positive

The Economic Tendency Indicator climbed 1.1 points from 109.4 in April to 110.5 in May. The consumer indicator fell 4.1 points right down to 70.4, but the indicator for the business sector rose to 115.1. The difference in sentiment between these two parts of the economy was already historically wide.

The confidence indicator for the manufacturing industry gained 4.2 points to almost match its previous high in October last year. Low stock levels and strong order books explain its unusually high level.

The confidence indicator for the building and civil engineering industry fell 2.4 points, due mainly to firms being less positive about their order books, but still signals a much stronger situation than normal.

The confidence indicator for the retail trade rose and is still well above normal. Stronger expectations for sales volumes in the coming months were behind the increase.

The confidence indicator for the service sector was unchanged at 109.7. Firms in the hotel and restaurant industry have been hit hard in recent years, but their view of business volumes has improved strongly over the past three surveys and has not been as positive since 2008.

The consumer confidence indicator fell 4.1 points to 70.4, its lowest since the financial crisis, which saw the indicator drop to 68.8 in October 2008.