Iran War Weighs on Business Sentiment

The index of current assessments of the overall economy fell by 2.1 points to –1.9 points in March, placing it below the zero line that separates positive from negative assessments. In the manufacturing sector, the situation index fell (–1.6 points) and, at –7.4 points, was once again deep in the sceptical range. In the construction sector, by contrast, the situation index rose (+3.0 points), but remained below the zero line at –2.6 points. In the service sectors, the situation index lost momentum (–2.9 points), but remained just within positive territory at 1.1 points. The retail sector also saw a decline in the current situation index (–1.7 points), which stood at 0.1 points on the zero line.

The index of business expectations for the overall economy fell slightly in March (–0.2 points) and, at –2.3 points, remained below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index fell (–1.5 points) and stood at –11.7 points, indicating sceptical economic expectations, though at a level typical for the retail sector. In the services sector, too, the expectations index fell (–0.5 points), but remained just above the zero line at 0.7 points. The construction sector showed an improvement (+4.8 points); the expectations index stood at 2.1 points, above the zero line. In manufacturing, however, the expectations index declined in March (–1.7 points) and, at –6.0 points, was once again lower in the range of sceptical economic expectations.