Release date 25 October 2021
Declining export orders in manufacturing depressed the economic climate index
October’s reading of economic sentiment index (2.2 points) decreased by 2.5 percentage points compared to September what is more than we expected (a rather modest decrease from 4.7 to 4.0). The monthly change in the index was negatively affected mainly by the confidence indicator in manufacturing (by 2.0 percentage points), the consumer confidence indicator (by 0.7 percentage points) and the confidence indicator in retail trade (by 0.4 percentage points). The effects of confidence indicators in services and construction were positive (by 0.5 and 0.1 percentage points, respectively). The main contribution to the overall decline was thus due to the drop in the confidence indicator in manufacturing, which was 5 percentage points than in September 2021. Compared to October 2020, it was one percentage point higher and still 2 percentage points higher than the long-term average.
A closer look at the confidence indicator in manufacturing shows that the components of exports orders (from 14 to 1) and total orders (from 18 to 2) decreased, which is in line with anecdotal evidence on challenges for some automotive parts suppliers. On the other hand, companies still believe in rising production and rising sales prices, and the months of guaranteed production have risen to one of the highest values (5.1 months). Our autumn forecast already includes expectations of a smaller strengthening of industrial production in manufacturing in 2022 (4%, after 9% growth in 2021). Among the business sectors, the confidence indicator decreased the most in manufacturing of other transport equipment (-25), manufacturing of fabricated metal products (-24), manufacturing of beverages (-23), working and processing of wood (-21) and manufacturing of rubber and plastic products (-20). It increased only in textile production (+18).
More economic topics are below in the attachment.
EU Candidate Countries & Potential Candidates Economic Quarterly; 3rd quarter 2021; Technical Paper 052; October 25 2021; Brussels; available at: https://ec.europa.eu/info/sites/default/files/economy-finance/tp052_en.pdf, free download https://www.bruegel.org/2021/10/do-robots-dream-of-paying-taxes/, free download
Comment/Abstract: An overview of economic developments in candidate and pre-candidate countries (Albania, Montenegro, North Macedonia, Serbia, Turkey, Bosnia and Herzegovina, Turkey)..
Consumer Price Index-CPI, Slovenia, October 2021 (Statistical Office of RS): +2.5% y-o-y
Comment: We expect CPI gradually to increase also in October (from +2.4% in September) due to increase in fuel prices.
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