BUSINESS

Major slide in economic sentiment

TAGS: Economy

The economic sentiment index recorded a significant decline last month, dropping to 101.3 points from 105.3 points in July, the Foundation for Economic and Industrial Research (IOBE) announced on Monday, saying that this was largely due to the deterioration in expectations in the sectors of industry and construction.

This drop, already reported last week by Eurostat, saw business expectations in industry falling from 105.9 points in July to 104.5 in September. IOBE identifies two main factors as responsible for that slide: the international risks resulting from the slowdown in demand, and the local economy’s failure to capitalize on Greece’s exit from the bailout program and improve the terms on which it accesses money markets or reduce the cost of financing for the public or the private sector.

The slowdown in the growth of output in manufacturing was also reflected in the Purchasing Managers Index (PMI) compiled by Markit, which slipped from 53.9 points in August to 53.6 points in September.

IOBE data point to a greater slide in construction sector expectations, with the index reading falling to 52.3 points from 56.9 points in the previous survey. In contrast, there was a rise in consumer confidence as well as in expectations in the retail commerce sector.

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