The Business Expectations Index for the manufacturing sector recorded a significant increase in May, rising to 113.9 points from 109.2 points in April, according to the latest “Economic Climate Survey” by the Foundation for Economic and Industrial Research (IOBE).
Among the index’s components, the negative balance of assessments regarding orders and current demand weakened slightly and evened out, while the positive balance of forecasts for production in the coming months strengthened accordingly, while inventory levels remained unchanged.
More specifically:
a) The level of orders and current demand balanced out in May, from -7 the previous month, with 19% of businesses reporting orders that were low for the season and 19% (up from 17%) reporting the opposite.
b) In forecasts for production trends over the next 3–4 months, the relevant balance strengthened significantly (+35 points from +28 points), with 42% (up from 40%) of businesses forecasting an increase in production over the next quarter and 7% forecasting a decrease.
c) Regarding finished goods inventories, the balance remains at +5 points, with 14% of businesses reporting inventories higher than usual for the season.
d) Mixed trends were recorded in the export activity indicators: seasonally normal forecasts for exports in the coming months weakened slightly, while, conversely, negative assessments of orders and foreign demand eased significantly (-7 from -17 points).
e) The employment forecast index improved to +12 (from +5) points in May, with the percentage of businesses forecasting an increase in employment standing at 23% (from 17%) and 11% (from 12%) expecting a decline.
f) The strongly positive balance in forecasts for price changes from the previous month narrowed significantly to +31 points from +41 points in April, with only 2% expecting a decrease.
Business Expectations Index in Industry
It is worth noting that uncertainty regarding the economic environment decreased marginally, as in response to the question regarding the ease of forecasting the company’s future growth, in May, 51% of businesses considered it difficult or relatively difficult to predict, down from 52% the previous month.
At the sectoral level, the consumer goods expectations index rose sharply to 114.8 points (from 109.6 points). There was a significant improvement in forecasts for production over the next 3–4 months, while negative assessments of orders, conversely, declined slightly.
For capital goods, the index stood at 131.2 points, up from 125.8 in April. The improvement in the index is due to strongly optimistic forecasts for production over the next 3-4 months, with orders and demand remaining unchanged, as do inventories.
The index for intermediate goods improved to 109.5 (from 105.1) points, with negative assessments of orders and demand easing significantly, production in the coming months strengthening moderately, and inventories declining slightly.
Business Expectations Index in Industry
