Release date 21 February 2022
Slovenian consumers a little less worried about future prices
Consumer confidence indicator was 3 percentage points higher on a monthly basis in February 2022, which was quite in line with our expectations (growth of 2 points). The rise in the confidence indicator was due to more optimistic consumer expectations regarding the economic situation in the country (by 8 percentage points) and the financial situation in households (by 7 percentage points). In our opinion, this is due to expectations of the withdrawal of the remaining containment measures as well as expectations of continuing wage growth. Consumers' expectations of higher price tag purchases were more pessimistic (by 3 percentage points). The consumer opinion indicator on the current financial situation in the household remained unchanged from the previous month. The indicator of CPI movements in the last 12 months reached its highest value since October 2008. This means that more and more consumers are feeling the increase in prices. The indicator of future CPI movements is much more important. 43% of consumers believe that they will grow faster, the lowest percentage after September 2021. One third of the, believe that prices will rise at the same rate (37% in January 2022), and 14% that at a lower rate than in the past (highest share since March 2021).
January data on issued building permits were below expectations. 29% fewer building permits were issued than in January 2021, but projects were larger, which means that 2% fewer apartments (measured by square meters) will be built. The total area of all buildings planned in January 2022 is expected to measure slightly more than 153,000 m2, which is 15% less than in January 2021. The planned area of residential buildings was lower by 7% and the area of business buildings by a fifth.
More economic topics are below in the attachment.
December’s industrial production in the EU-27 increased by 0.7%, and in the euro area even slightly faster (which is quite unusual as non-EA-19 have higher growth) by 1.2%. The largest contributor to the monthly growth was sector of production of capital goods (+2.6% in the euro area), which is mainly due to the recovery of the automotive industry due to improved supply of some components. Among member states, growth was high in Ireland (+10.3%), Lithuania (+6.2%) and Luxembourg (+5.1%), with declines in the Czech Republic (-2.9%), in Austria (-1.1%) and Italy (-1.0%). In Germany, growth amounted to 1.1% (the same as in Slovenia) and was positive for the third consecutive month. Throughout 2021, industrial production was higher by 8.2% in the EU-27 and by 7.8% in the euro area.
The ifo institute argued at a conference of federal ministers that Germany should coordinate the withdrawal of support measures in the economywith the removal of restrictions on the economy, which should be done by 20 March. In specific cases, they advocate the possibility of flexibility, but the federal ministers are of the opinion that it is appropriate to extend the support at least until the end of June 2022.
Global production linkages and stock market co-movement; Raphael Auer, Bruce Muneaki Iwadate, Andreas Schrimpf and Alexander F. Wagner; BIS Working Papers No 1003; 17 February 2022. Available at: https://www.bis.org/publ/work1003.htm
Comment/Abstract: Authors developed new measures, that provide evidence of a strong link between changes in real integration – in particular via GVCs – and equity market co-movement. This also holds when controlling for financial openness and other factors that could confound the role of real openness. First, they show that there are substantial differences between their novel measures of intermediate and final trade intensity and traditional openness measures, such as the ratio of exports and imports to GDP. Second, they find bilateral stock market co-movement to be related to trade integration measured by granular input-output linkages and value added of trade. Third, real integration explains equity market correlation well even when controlling for time trends, country characteristics, socioeconomic ties, and measures of financial integration.
Economic sentiment index, Slovenia, February 2022, (22 February), Statistical Office of RS; 6.0
Comment: We expect another monthly positive growth in ESI as announced reopening in services and reduced bottlenecks are fuelling optimism among business sectors.
“The quest for certainty in forecasting outcomes can be the enemy of progress.”
(Nate Silver)