The indicators diverged in the testimony – Newspaper Kommersant No. 159 (7360) dated 08/31/2022
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In August, the indicator of economic sentiment in the euro area fell to 97.6 points against 98.9 points a month earlier. For all EU countries, the value of this indicator decreased from 97.5 to 96.5 points. The indicator is calculated based on the results of surveys of industrial companies (40% of respondents) and the service sector (30%), consumers (20%), retailers (5%) and construction (5%). A value above one hundred points indicates an expansion of activity, below – a decrease in activity. Back in June, the indicators for both the euro area and the EU countries were in the positive zone (103.5 and 101.8 points), at the beginning of the year the indicator values exceeded 112 points.
In Germany, the index fell from 104.7 points in June to 99.7 points in July and 97.2 points in August. In France – from 102.4 to 99.8 points. In Italy – from 105 to 100.2. The indicators of Croatia (102.9 points), Greece (101.5), Portugal (103.5), Romania (100.1) remained in the positive zone. The lowest values (below 90 points) are in the Czech Republic, Denmark, Estonia, Austria, Slovakia and Finland. “Companies are more pessimistic about the state of the economy, orders are falling in the industry, demand is falling in the service sector, but the labor market remains above the trend,” ING Bank notes. The bank predicts the entry of the euro area countries into a “mild recession” in the third quarter of the year, but also points to a decrease in expectations for selling prices.
Another leading indicator, the Composite Purchasing Managers’ Index (PMI) according to S&P Global, also showed a decrease in activity in August: the indicator fell to 49.2 points from 49.9 points in July. In the services sector, the indicator remained in the positive zone, amounting to 50.2 points, but its value turned out to be the lowest over the past 17 months. In the industry, PMI remained almost unchanged – 49.7 points against 49.8 in July (the industrial output sub-index rose slightly – 46.5 points against 46.3 points in July).
In the US, meanwhile, on the contrary, consumer activity is growing – its index, according to the Conference Board, resumed growth after three months of decline and amounted to 103 points against 95.3 points in July. The current situation assessment sub-index improved from 139.7 points to 145.4, while the expectations sub-index improved from 65.6 to 75.1 points.
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