Economic Expectations Improve, Situation Assessments Remain Subdued

The index of current situation assessments of the overall economy rose by 0.5 points in July, but remained below zero at –3.0 points. In manufacturing, the situation index lost momentum as in the previous month (–1.4 points) and, at –15.3 points, remained well below the zero line that separates positive from negative assessments of the situation. In the construction industry, the situation index gained 4.2 points and, at 3.3 points, is in the confident range for the first time since August 2023. In the service sectors, the situation index rose slightly (+0.7 points) and remained just in positive territory at 1.1 points. In the retail sector, the situation index deteriorated slightly (–1.5 points), but remained in positive territory at 3.8 points.

The index of business expectations for the economy as a whole rose in July (+2.6 points) and, at –1.7 points, remained just below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index rose slightly (+1.4 points) and, at –10.7 points, remained in the sceptical economic expectations range. In the service sectors, the expectations index gained 1.2 points and was back in positive territory at 1.2 points. There was also a slight improvement in the construction industry (+1.3 points). The expectations index remained above the zero line at 1.5 points. In the manufacturing sector, which is important for the economy, the expectations index rose noticeably in July (+5.9 points) but remained in the sceptical economic expectations range at –4.6 points – albeit at its highest level since May 2023.