Belgian Confidence Edges Up Even As Unemployment Fears Rise

The Belgian National Bank consumer confidence index has edged up in October and at a time that other measures in surrounding countries seem to be getting weaker. After operating without a real government for an extended period of time Belgium finally has a deal to change its country to a new sort of confederation to be modeled more on the Swiss Cantonal system with much more localized control. Belgium has always been wrought by conflicts between its Flemish population and the Walloons. Resolving this decades-old problem has probably helped to improve people’s sense of their own well-being.

In the narrow survey format the results do not show all that much improvement, we will want to watch Belgium to see if this improvement is for real. The narrow survey index rose to -7 in Oct from -9 in Sep. The reading stands in the 47th percentile of its queue in a stream of data dating to 1991.

The economic situation in the 12-months is expected to be much better according to Belgians who have marked their expectations up to –8 from -15 bringing them nearly to the mid-point of their range (48th percentile of their queue). This is even though they rated the past twelve months as worse than they had rated them in September. Is that really a statement about the economy or is it about the improved political situation?

Price trends are seen to be advancing and Belgians still see slightly higher unemployment prospects ahead. Despite that, unemployment is only in the 42st percentile of tis range and is somewhat below its historic midpoint reading.

The household financial situation is seen to be improving. Respondents rate the last 12-months as better than their rating of a month ago and rate the next twelve months at a +1 compared to a -1 rating in Sept. That rating still leaves it in the 45th percentile of its queue.

The current situation is given a raw score of 22, up from 20 and that puts it in the 83rd percentile of its historic queue. So Belgium is like Germany in that regard; the current readings are rather strong but outlook readings are considerably more downbeat and guarded.

Household savings prospects are improved over the next 12-months but only slightly while the environment for savings currently improved by four points to -26 in October and it has been on an improving trend in recent months. The assessment on current savings resides in the 52nd percentile of its historic queue of ranked data, while the outlook is much weaker in only the 21st percentile.

On balance Belgium still is an irregular economy. Conditions currently are still pretty good as seen in the current surveys. But the outlook is seeing relatively weaker readings albeit reading that are improving. And there is still the expectation that underemployment will rise. There is some clear improvement in Belgium while the survey is still demonstrating some moderately weak readings and the role of recent political events in these perceptions remains elusive.