Still a gloomier sentiment than normal

The Economic Tendency Indicator was almost unchanged in August, edging down from 94.9 to 94.7, and continues to show somewhat weaker sentiment than normal. There were only minor movements of less than a point in all of the component sectors. For both households and in many sectors of the business sector, the view of future development is significantly more optimistic than normal.

The confidence indicator for the manufacturing industry fell to 97.1. Manufacturers’ employment plans have historically been negative on average, but are now slightly optimistic and so stronger than normal.

The confidence indicator for the building and civil engineering industry gained 0.9 points to 98.2. There is still a big gap between the two subsectors, with the civil engineering indicator climbing 3.2 points to 111.7 but the building indicator rising 1.6 points to just 94.8.

The confidence indicator for the retail trade edged down to 101.7. This is the only sector where sentiment is stronger than normal, after trending up from a level of around 80 at the beginning of 2023.

The confidence indicator for the service sector climbed 0.8 points to 93.1.

The consumer confidence indicator was almost unchanged and still points to weaker sentiment than normal. There is a substantial gap between forward-looking and backward-looking questions: consumers’ expectations for both the wider economy and their personal finances over the next 12 months are more positive than normal, while their view of both the economy and their finances over the past 12 months is more negative than normal.