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Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Louise Curley October 25, 2005
The healthy October rises in German and Dutch measures of business confidence following yesterday's report of continued rising business confidence in France are beginning to suggest a pickup in economic activity within the Euro Zone.
Although the pessimists still outweigh the optimists in Germany, the excess of pessimists declined in October to 3.5% from 8.9% in September according to the IFO measure of confidence. In the Netherlands, the optimists who had exceeded the pessimists in September by 1.3% increased their excess over the pessimists to 4.3% in October. The percent balances of the optimists over the pessimists for both German and Dutch business are shown in the first chart.
In appraising current economic conditions in Germany, businessmen have generally been more pessimistic than optimistic. In the entire history of the IFO confidence data, from January, 1991 to date, the only time when the balance of opinion on current conditions was positive was the period from January 1991 to March 1992 and the month of May 2000.In their expectations of conditions six month ahead, German businessmen have generally been more optimistic, but even here, the times when the optimists outweighed the pessimists have been few and the positive balances small. The second chart shows the history of the IFO's percent balances of opinion of German businessmen for current conditions and expectations of conditions six months ahead. Because of this apparent bias in the IFO data, it is more useful to look at the changes in the data rather than the absolute values.
In the third chart we show the year-to-year changes in the appraisals of current conditions and expectations of conditions six month ahead. Here we see a marked increase in confidence in October both in current conditions and expectations for conditions six month ahead.
Business Confidence Indicators (% Balance) | Oct 05 | Sep 05 | Oct 04 | M/M Dif | Y/Y Dif | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|---|---|
Netherlands | ||||||||
Producers' Confidence | 4.3 | 1.3 | 1.1 | 3.0 | 3.2 | -0.1 | -5.6 | -1.5 |
Germany IFO | ||||||||
Business Climate | -3.5 | -8.9 | -10.7 | 5.4 | 7.2 | -9.6 | -17.6 | -22.0 |
Business Situation | -7.4 | -12.1 | -16.1 | 4.7 | 8.7 | -17.0 | -27.9 | -34.0 |
Business Expectations | 0.5 | -5.6 | -5.2 | 6.1 | 5.7 | -1.8 | -6.5 | -9.1 |