Recent Updates

  • Iceland: Wage Index (Sep)
  • Ukraine: Retail Trade (Sep)
  • Spain: Bank Lending Survey (Q4), International Trade Summary (Aug)
  • Korea: PPI, Tourist Arrivals (Sep)
  • Turkey: Consumer Confidence Index (Oct)
  • Finland: Building Production (Aug)
  • Kazakhstan: Banking System Survey (Sep)
  • Euro area: ECB Banking Lending Survey (Q4)
  • Finland: Hours Worked, LFS (Sep)
  • more updates...

Economy in Brief

EU Sentiment is Fading Fast
by Robert Brusca November 30, 2007

Mixed but weakening, conditions. The monthly EU sectors show that weakness still stalks the EU region. Still some sectors have improved this month. The EU industrial index improved in November to +3 from +2. The retail index improved from +2 to +4. Despite that consumer confidence slipped to -7 from -5. The construction sector also switched from being flat to a -1 reading. But the largest drop was in services where the index fell to +14 from +19. The services readings now stand only in the 52nd percentile of its range. Retailing and construction are still in the 90th-something percentiles of their respective ranges. The industrial sector is now in its 88th percentile. But consumer confidence has slipped to the 69th percentile. While there is some mixture in these figures it is clear that the consumer is beset with concerns while the MFG sector has held up. Construction, not having ever been very strong, give us a very high positive range ranking on a raw reading of -1.

The good, the bad and the ugly. Across EMU countries we find weaker conditions in general. The overall sentiment is at a ranking of only the 71st percentile. France still ranks in its 81st percentile. Germany has slipped to its 64th. Italy and Spain hover around the 50% mark for overall sentiment.

Risk of action…and inaction. On balance, Europe is slipping but not yet doing poorly. But we know that exchange rates work with a lag and there is more of that strong euro impact in train. Also, that the recent inflation headline of 3% will send chills up the spine of the ECB. Despite concerns of an overly strong EURO the ECB with too-strong money and credit growth will have a hard time balancing the things it wants to do (hike rates and fight inflation) with the things it does not want to do (weaken already weakening growth and spur an even stronger euro).

EU Sectors and Country level Overall Sentiment 
EU Nov
07
Oct
07
Sep
07
Aug
07
%tile Rank Max Min Range Mean R-SQ
w/
Overall
Overall 107.6 109.6 110.6 113.1 78.5 62 117 74 43 100 1.00
Industrial 3 2 3 5 88.2 19 7 -27 34 -7 0.89
Consumer Confidence -7 -5 -4 -3 69.0 60 2 -27 29 -10 0.82
Retail 4 2 1 6 92.6 7 6 -21 27 -6 0.47
Construction -1 0 1 0 91.1 17 3 -42 45 -18 0.44
Services 14 19 19 22 52.6 75 32 -6 38 17 0.80
  % M/M Based on
Level
Level  
EMU -1.1% -0.8% -2.8% -0.9% 71.2 80 117 74 44 100 0.94
Germany 0.1% -0.6% -3.3% -0.9% 64.0 62 121 79 42 100 0.62
France -0.4% 0.5% -1.5% -1.2% 81.6 27 119 72 47 100 0.80
Italy -4.2% -0.2% -0.8% -3.0% 52.7 125 121 72 49 100 0.79
Spain -0.2% -2.7% -3.4% 1.1% 50.0 178 118 67 50 100 0.65
Memo: UK -4.4% -2.0% 1.1% 4.5% 78.2 60 119 69 50 101 0.40
Since 1990 except Services(Oct 1996) 208 -Count Services: 126 -Count
Sentiment is an index, sector readings are net balance diffusion measures
close
large image