Release date 26. September 2022
Larger-than-expected drop in economic sentiment index (ESI)
The economic sentiment index (ESI) dropped by 4.5 p.p. m-o-m in September, which was a bigger drop than expected (our estimate: -0.7 p.p.) and thus fell below the long-term average. Decrease of indicator was influenced by all five components: the most by drop in manufacturing confidence (2.5 p.p. contribution to the decrease), followed by services (-1.3 p.p.). Retail trade sentiment had a slightly smaller impact (-0.3 p.p.), as well as consumer sentiment (-0.3 p.p.) and sentiment in construction (-0.2 p.p.). Excluding the pandemic period, the last time the indicator was this low was in April 14. Confidence in manufacturing fell by 7 p.p. m-o-m, in retail trade by 6 p.p., and in services by 5 p.p. In the construction, it fell by 3 p.p. and the consumer confidence decreased by 1 p.p. In services (15), retail trade (15) and construction (13), the indicator remained above the long-term average value, while the consumer confidence indicator (-40) was well below it and the lowest since June 12. In manufacturing (-8), the indicator slipped considerably below the long-term average in recent month. The main contributor to the fall in manufacturing sentiment was the drop in the indicator of expected production (-11 p.p.), followed by the indicator of the stock of finished products (-5 p.p.) and total orders (-3 p.p.).
More economic topics are below in the attachment.
The US Composite PMI rebounded in September (from 44.6 to 49.3), reaching a 3-month high, mainly due to a rebound in services PMI (from 43.7 to 49.2). This still means a slight contraction in services. The manufacturing PMI also strengthened (from 51.5 to 51.8). Meanwhile, the manufacturing output PMI rose from 49.2 to 49.5 to a 2-month high, which still suggests a slight contraction in the current production (below 50). New orders strengthened in both services and manufacturing. This was mainly due to higher demand in domestic market, as new export orders fell again. Employment increased further, but slightly less than in August. Source: S&P Global
According to the flash estimate, consumer sentiment in the EU-27 decreased by 3.5 p.p. in September. With a value of -29.9 it was the lowest in the history of measuring this indicator. More detailed data by country will be published on September 29. Source: Eurostat
BIS Quarterly Review, Claudio Borio, Hyun Song Shin et al., September 2022. Available at: https://www.bis.org/publ/qtrpdf/r_qt2209.htm
Comment/Abstract: In this publication, a reader should notice many great articles as for example about influence of market swings on perceptions of the policy outlook, about commodity markets (shocks and spillovers), market conditions, stress and borrower vulnerabilities, their distribution and credit losses etc.
CPI, Slovenia, September, (30 September), Statistical Office of RS; +11.2% (+11.0% in August 2022)
Comment: Lower price of crude oil and its derivatives is likely to cushion the effect of rising prices in other parts of the consumer basket. Nevertheless, we expect annual inflation to reach new high at 11.2%, which translates into 0.2% monthly price increase.
“The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”
(Daniel J. Boorstin)