Lack of confidence

We now have the results of the real sector confidence indices from the Central Bank for December, which showed us the summary of the representatives of the real sector for 2018:

“The start of the year was not that bad. Even the first quarter went well. But after March, things broke down, our anxiety increased. We spent the sum- mer months trying to understand what was going on and the situation was a disaster when we entered autumn. We’ve spent the last two months trying to fix our situation, but we’re still in a bad position on some issues...”

Indeed, the real sector did not make a bad start to the year. The real sector confidence index rose steadily in the first three months. By March, the index was above 111.9, above the average of the last twelve years. In April, the decline began. The real sector confidence index decreased continuously until October, falling to 87.6. There was a small recovery in November, followed by a slight decline in December. The year closed at 91.5.

Contradictions

The overall path of the eight sub-sectors of the real sector confidence index seems to contradict the general trend of the index. The lowest level of the index overall was 55.6 in September while the real sector index was 89.6. Three months later, the general trend index jumped from 55.6 to 85.2 while the real sector index rose from 89.6 to only 91.5. Naturally, we cannot expect a change in all sub-sectors which parallel the general index but there should not be such a difference.