Release date 26 November 2021
November’s economic sentiment defied the poor epidemiological picture
Confidence indicators in manufacturing (+2 percentage points compared to October) and retail trade (+7 percentage points) in Slovenia increased in November, while in construction (-1 percentage points) and services (-1 percentage points) they decreased. The economic sentiment index (ESI) was thus 0.8 percentage points higher in November than in October, which is higher than our expectations (we expected a drop of 1.7 percentage points). It was also higher than the long-term average (by 4.4 percentage points).
Despite the growth of confidence in manufacturing, the current production indicator deteriorated by 3 percentage points, while other indicators within manufacturing mostly improved.
Despite falling by 1 percentage point, the confidence indicator in services was 5 percentage points higher than the long-term average. Only the indicators of the expected sales price and the business situation improved. The upward trend of these two indicators thus continues (the first has been increasing since April 2021, the second since the beginning of this year).
In the Employment Outlook, a survey conducted twice a year among employers with more than 10 employees, the Employment Service of Republic of Slovenia showed that the employment prospects of Slovenian employers in the private sector remain largely positive. Employers have identified the possibility of 33,000 new jobs (2.8% growth), but it should be emphasized here that this is not a net amount, but a gross amount. Also, in cases where companies do not acquire suitable employees, they do not hire them. The most positive outlook regarding employment trends are in construction, other miscellaneous business activities and catering. Within these activities, the following profiles are exposed: masons, drivers of heavy trucks and tractors, workers for simple works in manufacturing, welders and salesmen. In the past six months, more than half of employers (51.2%) have faced a lack of suitable candidates for employment. Large companies faced a shortage of suitable candidates most often, that is, in three-quarters of cases, which is somewhat surprising. The data show that discrepancies in the labor market are deepening, and employers' problems with finding staff are becoming more frequent. The catering and health and social care activities are characterized by the highest share of employers who expect difficulties in finding staff in the future. In these activities, more than 70% of employers anticipate that they will have difficulty finding staff in the future.
More economic topics are below in the attachment.
The November’s value of the international trade indicator calculated by IFW Kiel shows that delays in international shipping are easing somewhat, but no significant improvement is expected in the coming months. The value of world trade is expected to increase by 0.2% in November compared to October, mainly due to strong growth in exports of China (+ 2.9%) and the EU (+1.5%), while the decline in production of vehicles in Germany influenced a meagre expected rise in exports for Germany (+ 0.1%).
The composite PMI in the USA fell slightly in November (from 57.6 to 56.6), mainly due to a decline in sentiment in services (from 58.7 to 57), while in the sentiment in manufacturing improved from 58.4 to 59.1. The manufacturing sector managed to increase current production slightly, despite similar challenges as in Europe, and new export orders increased sharply. The withdrawal of certain containment measures in the USA was key to keeping the level of optimism relatively high. As in Europe, companies are cautiously increasing stocks of input products, both because of favorable conditions for financing working capital purchases and because of the fear that their price will be higher and availability lower. This could also mean less demand for these products in the coming months, or it could also put pressure on product sales prices in the event of a sudden turnaround in orders.
BIS residential property price statistics, Q2 2021; 25 November 2021, 8 pages, free download at: https://www.bis.org/statistics/pp_residential_2111.htm
Comment/Abstract: Global house prices growth strengthened further in the second quarter of 2021 in real terms, to 4.8% year on year, their highest rate since the start of the Great Financial Crisis (GFC). House price developments diverged further between advanced economies (where they accelerated further, to 8.6% year on year in Q2 2021) and emerging market economies (down to1.8%). In real terms, global house prices now exceed their immediate post-GFC average levels by 24.5%.
GDP, Slovenia, Q3 2021/Q2 2021, real, seasonally adjusted (Statistical Office of RS); +2.6%
Comment: After a 1.9% rise in GDP in Q2 2021, we expect a 2.6% growth in Q3 2021 for Slovenia. This should come above the growth in EU-27 (+2.1%)..
“Some people claim that they predicted a downturn, but they forecast a downturn every day, and finally, one day, they are right. Even a broken clock is right twice a day.” (Naved Abdali)