Release date 27 September 2021
Optimism remained high in services and construction
In September 2021, the economic sentiment/climate was 1.8 percentage points lower on a monthly basis (our estimate: -0.9%), while it was still 8.5 percentage points higher on an annual basis. Its change was negatively affected by confidence indicators in manufacturing (by 1.3 percentage points), in retail trade (by 0.7 percentage points) and among consumers (by 0.2 percentage points). The effects of confidence indicators in services and construction were positive (each contributing 0.2 percentage points).
The September survey data on confidence in manufacturing shows that the indicator fell from 10 to 7 index points, the lowest value since February 2021. The estimate of current production, export and total orders, stocks and expected prices even improved, while the estimate of expected exports and production dropped. The number of months of sold production (5.1) remained unchanged above historical average. We estimate that the above survey data did not significantly worsen our optimistic estimates of trends in the industry.
The consumer confidence indicator decreased slightly in September 2021 (-21, by 1 index point), which was expected, mainly due to increased media coverage of the new wave of COVID-19 infections. In particular, the components on future price developments, unemployment and the economic situation deteriorated slightly. There is no significant connection between the dynamics of household spending and consumer confidence, as, for example, the latter in Slovenia has fallen much more than in the EU-27, while this does not apply to retail trade.
More economic topics below in the attachment.
Italian businesses seem more resilient than core European peers to supply chain disruptions. Business confidence data for September shows a minor decline among manufacturers and a small gain in services. Confidence rebounded again in construction but fell quite markedly in the retail business. Resilience in manufacturing can possibly be attributed to the nature of the goods produced which tend to be less dependent on semiconductors. The strength in the service sector index seems to be reflecting the spreading impact of reopenings following a successful vaccination campaign. The monthly gain in the aggregate index is mainly driven by a 15-point jump in the tourism services sub-index, another evidence of a very successful summer season. The concurrent decline in the retail index could point to a temporary re-composition of consumption towards experience-based goods most affected by Covid-related lockdowns.
Ifo Export Expectations Rise (September 2021); Klaus Wohlrabe; iFo, 27 September 2021; available at: https://www.ifo.de/en/node/65315
Comment/Abstract: Export expectations climbed in almost all sectors in Germany. The largest increase was in the automotive sector, which expects significant growth in international sales. The situation is similar for the electrical and electronics industry. In the chemical industry, the indicator rose to its highest level since November 2010. By contrast, sentiment among manufacturers of machinery and equipment cooled somewhat, but they still expect sales to increase. Only the textile industry is currently expecting a decline in export figures.
CPI, Slovenia, Sep. 2021/Sep. 2020 (Statistical Office of RS): +2.4% (previous month: +2.1%)
Comment: prices are expected to increase y-o-y due to a large drop in prices in September 2020. Nevertheless, is the consensus estimate for average inflation increasing. For 2021 it stands at 1.5% and for 2022 at 1.9%.
“The affairs of this world are so shifting and depend on so many accidents, that it is hard to form any judgment concerning the future; nay, we see from experience that the forecasts even of the wise almost always turn out false.” (Francesco Guicciardini)
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