Economic Tendency Survey January 2024

Brighter signals from all sectors

The Economic Tendency Indicator jumped 5.8 points to 90.5 in January, the largest increase since April 2021. All sectors contributed to this improved sentiment, with the consumer indicator rising furthest. Firms’ inflation expectations one year ahead dropped to 1.7 per cent in January and have fallen for five consecutive quarters since peaking in October 2022.

The confidence indicator for the manufacturing industry climbed 4.2 points to 99.3, which can be considered a normal level. The improvement was due primarily to fewer firms reporting excessive stocks, and more positive production plans.

The confidence indicator for the building and civil engineering industry increased only marginally. As in recent months, sentiment is bordering on much worse than normal. While the overall mood is generally bleak, many of the forward-looking questions improved from the December survey.

The confidence indicator for the retail trade rose a further 3.7 points in January to 96.0 after gaining more than 4 points in December. The indicators for the motor trade and specialist retailers are still below normal levels, while the indicator for food retailers is above the historical average.

The confidence indicator for the service sector climbed for a second month to 90.2. Despite the weak overall mood, employment plans and labour shortages are at normal levels.

The consumer confidence indicator jumped 7.5 points to 82.3, the biggest monthly increase since the indicator was launched in 1996. The indicator for men climbed 8.4 points to 80.1, and the indicator for women by 5.0 points to 81.3.