Economic Tendency Survey June 2022

Consumers see no improvement in the next year

The Economic Tendency Indicator fell 4.4 points from 110.3 in May to 105.9 in June. All sectors other than construction contributed to the decline. The consumer indicator fell furthest, dropping another 5.8 points to a record-low 65.5.

The confidence indicator for the manufacturing industry fell 4.4 points to 120.6 but is still much stronger than normal. The fall was mainly a result of firms reporting larger stocks than in May.

The confidence indicator for the building and civil engineering industry went against the flow in June, gaining 1.1 points. This was due largely to firms reporting more optimistic employment plans than in May.

The confidence indicator for the retail trade fell 5.7 points, chiefly as a result of weaker expectations for sales over the next three months. It is only the question about stock levels that is keeping the indicator above a normal level.

The confidence indicator for the service sector decreased but still points to stronger sentiment than normal. One industry where the situation is much stronger than normal is hotels and restaurants, with many reporting an increase in demand for their services over the past three months.

The consumer confidence indicator dropped further from 71.3 to 65.5 and is now lower than it was during the financial crisis. Consumers’ view of whether now is a good time to make major purchases and expectations for their personal finances contributed most to the decline in June.