The Central Bank said today that consumer confidence improved in the second quarter, while business sentiment went down.
Quoting its ongoiing index, the bank said the consumer confidence indicator edged up during the second quarter of 2011, though the balance of replies remained negative. At -38 in June, the index stood three percentage points
above the corresponding level in March.
Consumers’ expectations regarding the unemployment outlook improved, as did their assessment of the general economic situation and of their own financial position over the subsequent 12 months.
Other consumer survey information showed that, on balance, respondents expected prices to increase in the following 12 months, though inflation expectations appeared to have moderated slightly during the quarter. Moreover,
the number of respondents believing that, in view of the general economic situation, the time was not appropriate to make major purchases increased.
BUSINESS SENTIMENT DETERIORATES
The Central Bank also said that business sentiment deteriorated in the second quarter of this year.
It said the deterioration was particularly marked in the manufacturing sector.
The seasonally-adjusted industrial confidence indicator turned negative in May after having been in positive territory for eight months in a row.
Compared with March, the indicator fell by 15 percentage points, to -8 in June.
"The deterioration in confidence was mainly propelled by less optimistic production expectations and by a higher number of respondents reporting weak
order book levels. To a lesser extent, it also reflected an accumulation of stocks of finished goods," the bank said.
In line with the drop in sentiment, employment expectations turned negative in June. Furthermore, a large number of participants indicated insufficient demand as the main limitation on business expansion, with respondents saying that the current production capacity was more than sufficient to meet demand. In the second quarter, the majority of manufacturers also anticipated a fall in their selling prices over the subsequent three months.
The bank said its index turned negative in all broad categories, namely consumer, intermediate and investment goods. Specifically, confidence fell among firms in the electronics sector, pharmaceutical firms, manufacturers of rubber & plastic products and fabricated metal. On the other hand, sentiment improved in the printing & reproduction media sector.