In a survey conducted with European Union support, the combined business and consumer confidence index of economic research company GKI remained unchanged at -12.9 points in July, as a result of a drop in the consumer confidence index and a rise in the business confidence index.

This also means that the unfazed seven-month improvement of the aggregate index has broken. 

The business confidence index rose to -7.1 points in July from -9.2 points in June. The consumer confidence index, however, declined to -29.3 points from -23.4 pts in the seventh month of the year.

Within the business sphere, expectations of trade and service companies improved substantially, while industrial companies turned only slightly more upbeat and construction businesses have virtually the same outlook as in June.

Respondents in the industrial sector grew more upbeat about past and future production volumes and the stock of orders. They also felt that their self-produced inventories were slightly bigger.

Those expecting price increases among industrial players outnumbered those that projected price reductions, while in latter group remained in clear majority in the construction segment. Service companies forecast slight price cuts, while the inflation expectations of consumers did not change in March from Feb.

Industrial and construction companies were a bit more confident that they would be able to expand their staff. The number of those seeing downsizing ahead was a tad lower than the number of those expecting to recruit new employees.

The economic sentiment index remains above the Sept 2008 level (-17.9), the last month before the onset of the global economic crisis.

The seasonally-adjusted index stood at -25 points in October 2008 and bottomed out at a historical low of -46.2 points in April last year. The index has been improving ever since."

Source: Portfolio Online Financial Journal