Global| Jun 23 2005Consumers Fret Over Economic Situation in Italy & Netherlands
Summary
Consumer confidence has eroded in Italy this month, with a decline of 1.4 percentage points in the ISAE indicator to 102.9 from 104.3 in May (seasonally adjusted, 1980=100). Concern over the overall economic situation is the broad [...]
Consumer confidence has eroded in Italy this month, with a decline of 1.4 percentage points in the ISAE indicator to 102.9 from 104.3 in May (seasonally adjusted, 1980=100). Concern over the overall economic situation is the broad source of discomfort, as people's assessment of the "general economic situation" dropped to 76.0 from 83.9 last month. While total confidence remains stronger than 2004 levels, the "general" indicator has fallen below last year's range.
At the same time, people see their own economic situations as holding up -- or at least not worsening as severely. The "personal situation" gauge climbed 1.8 points to 117.1, the highest level since September 2002. Associated survey items, such as household finances and financial expectations are moving in a narrow range, and buying attitudes toward major purchases and ability to save are actually improving. Attitudes about job prospects are mixed. This survey sees unemployment going higher, but new regulations give employers more flexibility about using temporary and part-time workers, so there is uncertainty about their implication for the number of jobs and the financial implications.
These considerations accompany the uncertainty over the EU constitution and the rise in energy costs. Perhaps the surprising thing about this survey is that its final outcome wasn't lower.
In the Netherlands, consumer confidence did drop more sharply, to -26 this month from -22 in May and -16 in April. The components here show the same pattern as in Italy, however, as the macro indicator, "economic climate" plunged to -30 from -22 in May and -8 in April. The "willingness to buy" indicator has been fairly stable, with -23 this month after -22 in May and -20 in April. The deterioration in these data break an improving trend that had run from mid-2003 to this spring, just before the vote over the EU constitution. This too suggests that consumers' worries are more over political uncertainties that about their own economic situation. Not though, please note, that they are optimistic about that, but just that their distress is less intense.
| Italy(Index, 1980=100) | June 2005 | May 2005 | June 2004 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Consumer Confidence Indicator | 102.9 | 104.3 | 100.1 | 101.4 | 106.1 | 115.8 |
| General Economic Situation | 76.0 | 83.9 | 89.0 | 88.6 | 91.4 | 105.2 |
| Personal Economic Situation | 117.1 | 115.3 | 106.5 | 107.9 | 113.5 | 121.1 |
| Netherlands Consumer Confidence Survey (% balance) |
-26 | -22 | -25 | -25 | -35 | -25 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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