Weaker sentiment

The Economic Tendency Indicator declined in March to 95.2, signalling a subdued sentiment. The consumer confidence indicator dropped sharply and now reflects a significantly weaker sentiment than normal. Sentiment also deteriorated within the trade and services sectors. Firms in the trade sector have raised their expectations regarding sales price developments over the next three months, which in March reached levels considerably above normal.

The confidence indicator for the trade sector declined in March, yet the sector continues to exhibit the strongest sentiment. However, firms' perception of the current sales situation is more negative than usual. The picture varies across industries: firms in the grocery trade and motor vehicle trade are highly pessimistic, whereas firms in the durable goods trade report a sales situation that is slightly better than the historical average.

The confidence indicator for the building and civil engineering industry increased to 101.6. The indicator has now remained around 100 for five consecutive months. Construction activity has reportedly remained largely unchanged over the past three months, yet many firms anticipate an increase in construction over the next three months.

The confidence indicator for the manufacturing industry increased marginally to 96.4 but remains the weakest sector within the business sector. Firms’ expectations regarding production volume development over the next three months remain unchanged compared to February and continue to represent the weakest component of the indicator.

The confidence indicator for the services sector declined to 97.9, reflecting a slightly weaker sentiment than normal. Service firms remain as dissatisfied with order volumes as in February. The confidence indicator for hotels and restaurants continued to decline in March and now signals weaker sentiment than usual.