Economic sentiment rises further but industrial confidence declines

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Consumer confidence edges up further

The consumer confidence indicator rose to 8 in the third quarter of 2017, from 5 in the preceding three-month period, posting the highest reading since the start of the survey. Almost all components contributed to the increase in consumer sentiment during the third quarter, with savings expectations for the year ahead being the main driver. Compared with the second quarter of 2017, a larger share of respondents expected the general economic situation and their financial situation over the following 12 months to improve. Respondents on balance continued to expect falling unemployment, although the share of respondents holding this view was broadly unchanged compared with the second quarter of 2017.

Additional survey data suggest that the share of consumers intending to reduce major purchases over the subsequent 12 months decreased further. At the same time, on balance, a marginally higher share of consumers expected inflation to rise.

Industrial confidence declines

Confidence in the industrial sector fell to 5 in the third quarter of 2017, from 8 in the preceding quarter, but still remained above its long-term average of -4.

The decline in industrial sentiment during the quarter under review was driven by both firms’ production expectations and their assessment of order books, with a net share of respondents assessing order books to be below normal for the season. In contrast to the second quarter, when stocks of finished goods were assessed to be above normal, respondents assessed stocks of finished goods to be below normal in the third quarter.

Meanwhile, additional survey data suggest that fewer respondents expected to increase their labour complement in the subsequent three months. At the same time, on balance, fewer respondents expected to decrease their selling prices.