Iran War Puts Pressure on Economic Climate

The index of current assessments of the overall economy fell by 3.0 points to –4.9 points in April, placing it once again well below the zero line that separates positive from negative assessments. In the manufacturing sector, the situation index fell (–3.4 points) and stood at –11.1 points, deep in the sceptical range. In the construction sector, the situation index fell slightly (–0.9 points) and stood at –3.1 points, below the zero line. In the service sectors, the situation index lost momentum more significantly (–3.6 points) and, at –2.5 points, entered negative territory for the first time since April of last year. In the retail sector, there was a slight decline in the current situation index (–0.1 point), which stood at 0.0 points on the zero line.

The index of business expectations for the total economy also fell in April (–4.4 points) and, at –6.9 points, was once again well below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index fell (–3.1 points) and, at –14.7 points, was in the range of sceptical economic expectations. In the services sector, the expectations index fell sharply (–7.9 points) and stood at –7.4 points, below the zero line. In the construction sector, the index did show an increase (+7.5 points), standing at 9.2 points. However, this rise is primarily attributable to construction price expectations; expectations regarding employment and the business situation have deteriorated. In the manufacturing sector, the expectations index fell in April (–2.3 points) and, at –8.5 points, was once again in the range of sceptical economic expectations.