As expected, exports of goods fell from EUR 3.5 billion (July figure) to EUR 2.8 billion in August, which is mainly due to the seasonal effect (manufacturing company usually have collective holidays in August). Compared to August 2020, exports were a quarter higher.

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).

As expected, in the autumn forecast, IMAD (Institute of Macroeconomic Analysis and Development) significantly improved its estimate for Slovenia’s real GDP growth in 2021, from 4.6% to 6.1%, which is one of the historically largest positive adjustments in terms of growth prospects.

Compared to the previous month, July’s growth of industrial production was negative (-1.7% vs our estimate: -1.0%), while year-on-year (compared to July 2020) it was 8.9% higher. As expected, growth slowed down (it was 15% higher year on year in the 1H 2021) to 13% in the seven months of 2021. In mining, industrial production was down 2.6% year on year in the same period, in energy by 1.5%, but in manufacturing it was higher by about 15%.

November data on exports (1 week ahead of Eurostat release) from Slovenian Statistical Office shows that trends have improved in final months, what was expected based on improving sentiment in manufacturing as well as anecdotal data from main companies. Y-o-y change (Nov. 20/Nov. 19) was positive (+0.9%; +EUR 30 m), for both group of markets (exports to EU: +EUR 20 m and exports to non-EU: +EUR 10 m).

The global production index JP Morgan Global Manufacturing showed that the sentiment in global manufacturing at the end of July (55.4) was quite similar to that in June (55.5), or that the rise in infections in some major countries did not contribute to deteriorating expectations of future or current operations. All three main types of manufacturing recorded growth, the slowest the category of consumer goods products, where growth accelerated. The highest sentiment in manufacturing was in the Netherlands, Germany, Austria, USA, while on the other hand, China (50.3) and Japan (53) were well below the average. Asia’s emerging markets were particularly weak, with activity in Thailand, Malaysia, Vietnam, Indonesia and Myanmar even declining.

GDP in the EU-27 increased by 1.9% in the Q2 21 compared to the Q1 21 (in the EA-19 by 2%, Reuters Consensus: +1.5%), which was more than we expected (1.4%). Among the 11 countries for which data are already available, the highest growth was recorded in Portugal (+ 4.9%, where, by the way, the fall in GDP was high in the Q1 21, at -3.2%) and in Austria (+4.3%). Growth was also high in Latvia (+3.7%) and Spain (+ 2.8%). GDP in Europe's largest economy - Germany, strengthened by 1.5% (after a 1.8% drop in the 1st quarter of 2021), growth in France was disappointing (0.9% after unchanged growth in the Q1 2021).

According to the latest data from the New York Times, 3.69 billion doses of vaccines have already been used in the world (48 per 100 people). For most vaccines, two doses are required for immunity. At the top of the scale are Malta (71% of the population vaccinated with two doses) and Iceland (70%). Among the world's major economies, the United Kingdom (54%), China (53%), Spain (51%), Canada (51%) and the United States (49%) are also at the top. In Slovenia, the share of people already received 2 jabs currently stands at 37%, which is close to France, the Czech Republic and Sweden.

The European Commission (EC) published its summer forecast on Wednesday, 7 July, raising the estimate for GDP growth in the euro area for 2021 from 4.3% to 4.8% (for 2022 from 4.4% to 4.5%) as well as for inflation (from 1.7% to 1.9% in 2021 and from 1.3% to 1.4% in 2022).

In May 2021, 41% more building permits were issued than in the same month last year, when administrative units performed only urgent matters. Compared to May 2019 (before the pandemic), 4% more were issued in May 2021, of which 17% more for residential buildings and 5% less for non-residential buildings.

Data on sales by individual manufacturing sectors in the first four months show (pharmacy data are confidential) that revenues were higher compared to the same period in 2019 in the manufacture of other vehicles and vessels (+ 16%), the manufacture of electrical appliances (+ 12%), computers, electronic and optical products (+9%), rubber and plastic products (+9%), manufacture of other machinery and equipment (+8%), wood working and processing (+ 7%), manufacture of fabricated metal products 6%), production of chemicals (+5%), production of furniture (+5%) and in four other activities. Sales were lower in nine sectors.

Gross domestic product (GDP) in Slovenia increased by 1.6% in real terms in the first quarter of 2021 (adjusted for the season and the calendar by 2.3%), which is comparatively the highest growth among EU member states that have already published data on the Eurostat portal. Ex-ante we estimated that the decline would be smaller than the EU-27 average, somewhere around 1%, and we were among the most optimistic.

A slightly more in-depth look at companies' data for FY2020 reveals that net sales revenues fell by 6.8% in 2020 (EUR -6.9 billion), of which EUR 3.7 billion on the domestic market (-6.5%) and EUR 3.1 billion on foreign markets (-7.3%). Looking at sectoral level, the nominal decline in sales was highest in trade (EUR -2.6 billion) and manufacturing (EUR -1.8 billion), in other miscellaneous activities (EUR -470 million) and in hotels and restaurants. EUR). Sectors that were growing were rare and included construction (EUR +70 million), water supply, sewerage, waste management and remediation activities (EUR +16 million).

On Friday, 21 May, Ajpes already revealed long-awaited data on the financial performance of companies and sole proprietors in 2020. Aggregate revenues of companies fell by 5.7% (of those, exports by 7 %), and that of sole proprietors by 5%, while value added dropped by about 1 %. Lower raw material prices in 2020 and state support measures (subsidies received) were key to ensuring that value added did not shrink.

The number of registered unemployed is still declining (77.1 thousand on 11 May, 2,200 less than at the end of April), which coincides with the relaxation of restrictive measures in the hospitality industry (restaurants, hotels), growth in manufacturing and construction. During the last week of April, the traffic of lorries on Slovenian motorways was 29% higher than in the same period of 2019 (45% for domestic vehicles and 21% for foreign vehicles), when the volume of transport was lower also due to Labour Day holidays with one working day less.

The Employment Service of Slovenia published the latest unofficial data on the number of unemployed on Wednesday, 5 th of May, which we believe is the most important short-term forward-looking indicator for Slovenian economy. Their number is still declining (78,000), with the number of new jobs increasing significantly in the current week (first week of May), which was also pronounced by the previous holiday week (school holidays in the last week of April lowered employment growth in the previous week). Source: Employment Service of the Republic of Slovenia.

The Employment Service of Slovenia published the latest unofficial data on the number of unemployed on Wednesday (14 April). Their number fell further, below 81,000. Given the circumstances (Easter lockdown between 1st and 11th April), this is a minor positive surprise.

Gross disposable income of households increased in Q4 2020 by one tenth (+3.8% or EUR +1.1 bn in 2020/2019). In times of crisis, household income falls but large public transfers (through job protection schemes and direct transfers) helped to limit the reduction in labour income in depressed sectors.

February full-month data on electricity consumption sounds intriguing (-8.1% drop at large energy users, after -6.5% in January) as industrial production in manufacturing was up by 1.8% y-o-y in January (February release should not be very different due to rising optimism). The rather large difference can probably be attributed mostly to growth in less-energy intensive production, in the high-value added segments (electrical, pharmaceutical, automotive).

Consensus Outlook for Slovenia’s GDP fell a bit in last month what was expected due to positive surprise in lower-than-expected reduction in GDP for 2020 (-5.5 %). Consensus GDP growth stands currently at 4.4 % for 2021 and at 4.3 % for 2022. But this does not tell the whole story as changes in subcomponents of the GDP (of expenditure method) were different.

There is a lack of forward-looking indicators in the past 2 weeks. Coincident indicators show that GDP was probably 2 % lower y-o-y in January, approximately on the same level in February and will probably grow in March as given current circumstances a hard lock-down for the 2nd half of March 2021 is unimaginable.

First release of Slovenia’s GDP at -5.5% (real) for the 2020 was above our expectations (we were on the optimistic side of the camp) which stood at -6%. Nominal GDP decreased just by 4.3%. Contribution of the household spending (55% of GDP) proved to be the main contributor to the reduction, falling by 9.8%. Real exports fell (-8.7%) less than imports (-10.2%) implying positive contribution of net exports to GDP (by 0.4 perc. points).

The situation on the job market continues to improve in February and follows seasonal pattern. The number of registered unemployed fell again below 90 thousand in mid-February. December numbers on new jobs added were positive as they increased by 0.2% vs. November, confirming that manufacturing and construction added most of the jobs.

Just as the public was frightened by new mutated variants of the COVID-19 virus, the numbers of infected, hospitalized, and dead people in Slovenia continued to decline on an unprecedented pace, similar to that in May 2020. The orange zone on the government traffic sign implies that all primary schools are opening on 15th February, the same goes for the last year class at secondary schools, including some lectures on universities. In addition, all retail outlets are able to operate freely. A very important restriction lifted is free movement across municipality borders and gatherings of up to 10 people.

The latest European sector PMI data showed rising output in nine out of 20 monitored sectors in January, the same total as in November and December. Of these, all were located in manufacturing except Banks, which was ranked fifth overall. There were signs of a widespread slowdown in manufacturing output growth by sector, while in services a number of sectors registered faster declines in January. The seven segments registered weaker rates of expansion than in December: Machinery & Equipment, Chemicals, Metals & Mining, Automobiles & Auto Parts, Construction Materials, Forestry & Paper Products and Technology Equipment.

In January 2021, the sentiment indicator increased by 2. 2 p. p. compared to December 2020. The monthly increase was influenced by all confidence indicators, except one (retail trade). The manufacturing confidence indicator was 4 percentage points higher than in December 2020.

The government extended the official pandemic for 2 more months, effective from January 17th, 2021. We believe the extension of support measures to be a positive sign. The scheme for covering fixed costs has been extended till the end of March (1st quarter 2021) and it is very likely (not official yet) that the scheme for supporting the job market (temporary lay-offs) will be extended until April 2021.

November data on exports (1 week ahead of Eurostat release) from Slovenian Statistical Office shows that trends have improved in final months, what was expected based on improving sentiment in manufacturing as well as anecdotal data from main companies. Y-o-y change (Nov. 20/Nov. 19) was positive (+0.9%; +EUR 30 m), for both group of markets (exports to EU: +EUR 20 m and exports to non-EU: +EUR 10 m). One must be careful by interpreting the headline figure for 11 months (-2.7% y-o-y) as the change severely underestimates the reduction of exports which is due to one-off increase in distribution of drugs of one bigger pharmaceutical group with operations in Slovenia and the region.