Economic Tendency Survey September 2023

Pessimistic consumers expect higher unemployment

The Economic Tendency Indicator edged up in September from 85.3 to 85.8, but confidence deteriorated in all sectors of the economy other than manufacturing. The share of firms expecting selling prices to rise is still higher than normal. A relatively high share of firms in the service sector expect selling prices to rise, while the reverse applies in the construction sector.

The confidence indicator for the manufacturing industry climbed 3.2 points to 100.1, thanks mainly to stronger expectations for production. Sentiment varies, however, with producers of capital goods reporting a strong situation but producers of intermediate goods reporting a much weaker situation than normal.

The confidence indicator for the building and civil engineering industry fell 1.6 points to 95.4, due to housebuilders taking a much weaker view of their order books.

The confidence indicator for the retail trade fell 4.1 points to 83.7, making it the part of the business sector with the weakest sentiment. Pessimism is widespread, with much weaker sentiment than normal in almost all segments.

The confidence indicator for the service sector fell in September and continues to show a much weaker situation than normal.

Consumers became even more pessimistic in September, with the indicator falling 1.5 points to 69.1. The only previous time the indicator has dropped below 70.0 was in the period from July 2022 to April 2023.