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Consumer, business confidence reach 2-year high - GKI

Analysis

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Economic research institute GKI's combined gauge of consumer and business confidence reached 2.5 points in October, rising into positive territory for the first time since before the crisis, according to a report by state news wire MTI.

The business confidence index rose to 8.7 points in October from 6.5 in the previous month.

Sentiment in the industrial sector climbed to a two-and-a-half-year high as assessments of order stock - including export orders -and outlooks for production improved. Assessments of inventories worsened.

In the construction sector, the outlook for output deteriorated a little but was close to levels in the months ahead of the coronavirus crisis. GKI noted the outlook for civil engineering companies continued to improve, while the outlook for the more optimistic building segment worsened a bit. Assessments of order stocks were a little worse.

GKI said the labor squeeze remains the construction sector's biggest challenge. Additionally, building companies must deal with a shortage of materials and capacity, while civil engineering companies face a drop in demand.

Confidence in the commerce sector improved a bit, edging over pre-crisis levels as companies gave better assessments of orders.

Sentiment in the service sector was also better as companies expected higher sales.

GKI's consumer confidence index rose to -15.2 points in October from -20.3 in the previous month as households' assessment of their financial situations improved markedly and more planned to make big-ticket purchases. More consumers also said they could make savings.

GKI's gauge of consumer and business confidence is supported by European Union funding.

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