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EMU: Business confidence improves further
Mon, Jan 25 2010, 09:30 GMT
started the year on a positive note, suggesting that the moderate recovery continued. The confidence indicator jumped to 92 from a downwardly revised 88 in December earlier reported as 89. It more than revised December’s unexpected 2 points dip. The index bottomed in March 2009 and has gone up continuously since, except for of December and stands at the level that was recorded immediately before the Lehman bankruptcy. Confidence is still somewhat below average (99). The details were supportive too. The past production, overall production outlook and the order-books sub-indices all improved, but remained well below long-term averages, which should temper the optimism. On top of that observation, the own-company production outlook, an important sub-index, deteriorated (slightly) for the second month in a row.
, that has some leading characteristics on the German and EMU-wide business indications, rose 0.9 points in January to -7, the 10th consecutive monthly gain, but still about 3 points below the long term average, but nevertheless up 25 points from the cycle lows.
increased a higher-than-expected 1.6% M/M, following a modestly upwardly revised drop by 1.9% M/M, earlier reported as -2.2% M/M. However, the October/November average only marginally exceeds the Q3 level, which contrasts with Q3 when orders rose by nearly 8% Q/Q. The report is outdated and doesn’t give new info.
rose by 0.3% M/M in December, only a fraction of the 1.1% M/M increase expected, dashing hopes that the economy had convincingly left recession in the fourth quarter. Still worse, while food store sales rose by 0.3% M/M, non-food store sales were up a meagre 0.1% M/M and department store sales would even have fallen 1% M/M. The high expectations were based on based on upbeat Christmas sales reports by retailers. Therefore, there are doubts on the reliability of the retail sales report that has in the past also often deviated from the outcomes for household spending.
However, this doesn’t undo the conclusion that the UK economy is only very sluggishly coming out of recession.