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Economy

August, the confidence indicator in the economy fell for the first time this year

  • 9/7/2021 6:12 PM
August, the confidence indicator in the economy fell for the first time this year

Business and consumer confidence fell for the first time this year in August.

Data from the Bank of Albania show that the Economic Sensitivity Index (ESI) declined slightly by 0.6 percentage points. However, this indicator still remains significantly above the long-term average, with 9.8 percentage points more.

The slowdown in the ESI during August was mainly caused by the decline in confidence in the trade sector. The industry also declined slightly, as confidence indicators continued to rise in the construction, services and consumer sectors.

The trade confidence indicator fell by 13.5 percentage points compared to the previous month, mainly influenced by businesses' assessments of the current performance of their business. Despite the sharp fall in August, confidence levels remain higher compared to the pre-pandemic period.

The industry confidence indicator decreased by 0.9 percentage points compared to the previous month, mainly influenced by the less positive assessments of businesses for the performance of export order contracts. Overall, their rating for total ordering and production contracts was slightly higher compared to July. However, industry businesses expect declines in output, prices and employment in the coming months.

The construction confidence indicator continued its upward trend in August, staying at the highest level of the last five years. The index increased by 0.8 percentage points compared to a month ago. This increase reflected the rating of businesses for a higher level of current orders, although the rating of businesses in relation to construction activity was lower than a month ago.

The indicator of trust in services also increased for the fifth consecutive month, reaching the highest level of the last three years. Its growth of 0.8 percentage points in August was mainly influenced by the demand-related component.

The consumer confidence indicator also increased in August, returning to the growth recorded for most of the year. However, its level is still below its long-term average. The overall indicator reflected the improvement of all its constituent components. Consumer ratings for actual purchases in large amounts and expectations for them improved in August. Expectations for the general economic situation and their financial situation also increased slightly.

/Klara Ruci/