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GKI-Wallis consumer-business confidence index reaches year low in December

GKI-Wallis's combined consumer-business confidence index slipped further to 21 in December, reaching its lowest point of the year, according to the latest survey carried out by the economic research institute GKI and by Wallis.

Both consumers and businesses reported worsening sentiment in December compared to November. The index took a sharp downward turn in the summer after the government announced its austerity package in June, but business confidence appeared to level out in the autumn after the actual measures were already known.
The business confidence index fell from -6.7 in November to -9.7 in December. Both the industrial and the construction sectors reported a worsening outlook in terms of production for the coming three months. They were also more pessimistic about orders, including industry export orders. More businesses said prices would rise and slightly fewer said they planned to make new hires. In a positive sign, however, industrial companies reported declining stocks.

The sub-index, which measures trade company confidence fell just one point in December, following a six-point increase in November. Trade companies reported a worsening outlook and market position and gave a poorer assessment of stocks. Their assessment of orders, however, remained more or less unchanged. More trade companies said they would raise prices. Industrial companies reported a slightly improved macroeconomic outlook in December, however, unlike construction or trade companies. The majority of respondents were still, however, pessimistic over the general prospects.

The consumer confidence index fell 2 to -52.9 in December. GKI noted that the decline was far smaller than the 30-point slip seen between April, immediately after general elections, and June, as well as the 10-point drop to September. Households reported worsening financial situations, and fewer said it was a good time to make savings.
The respondents said chances to buy large-value consumer durables on the short term narrowed, but the prospects for such big purchases in the coming 12 months hardly changed. Households' outlook for inflation as well as employment was practically unchanged from November. (Mti-Eco)