Statistics Lithuania informs that in August 2018, the economic sentiment indicator stood at 9 and, against July, decreased by 1 percentage point. The construction and industrial confidence indicators decreased by 8 and 1 percentage points respectively. The services confidence indicator increased by 1 percentage point. The consumer and retail trade confidence indicators remained unchanged.

Compared to August 2017, the economic sentiment indicator increased by 5 percentage points: the services confidence indicator increased by 12, construction – 9, consumer and retail trade – 6 percentage points. The industrial confidence indicator remained unchanged.





Economic sentiment indicator and its components

2017 2018 Largest since 2003 Smallest since 2003 VII VIII IX X XI XII I II III IV V VI VII VIII Economic sentiment indicator 3 4 4 1 0 –1 0 4 6 10 9 10 10 9 18

(2007-04) –44

(2009-01) Industrial confidence indicator 0 1 0 –4 –6 –9 –7 –6 1 3 0 3 2 1 14

(2007-04) –38

(2008-12) Construction confidence indicator –14 –19 –23 –29 –23 –28 –24 –15 –3 –2 –4 –4 –2 –10 20

(2007-05) –84

(2009-04) Retail trade confidence indicator 6 5 4 4 5 5 4 7 6 9 11 11 11 11 42

(2007-04) –58

(2009-02) Services confidence indicator 19 20 21 19 18 18 17 28 22 31 30 32 31 32 33

(2006-07) –46

(2009-03) Consumer confidence indicator* –12 –9 –9 –11 –10 –8 –8 –7 –6 –5 –3 –5 –3 –3 9

(2007-03) –56

(2009-01)



* More information is available in the news release Consumer Opinion Survey Results.

The results of an opinion survey of industrial enterprise managers showed that in August, against July, the confidence indicator decreased by 1 percentage point. This was influenced by slightly more pessimistic expectations for production: 32% of the interviewed planned on increasing the production in the coming 3 months, 11% – on decreasing it (a month ago, 32% and 7% respectively). Expectations for exports of goods were slightly more optimistic than a month ago: 24% of the enterprise managers expected exports to increase, 11% – to decrease (a month ago, 22% and 10% respectively). An increase in the number of employees was expected by 18% of the interviewed, while most (77%) of the respondents did not plan on changing the number of employees.





In August, the growth rate of industrial production decreased: 31% of respondents indicated an increase in production in the last 3 months, 17% – a decrease (a month ago, 33% and 13% respectively). Regarding production demand, the assessment of the respondents remained similar: most (71%) of the managers stated that demand was sufficient, 3% – that it was too high, 26% – that it was too low (a month ago, 72%, 3% and 25% respectively).





Fig. 1. Industrial confidence indicator and its components

In August, against the same period of the previous year, the construction confidence indicator increased by 9 percentage points. This was influenced by better assessment of order books (demand) and more optimistic employment expectations.





The demand assessment trend was better than a year ago: 69% of the respondents stated that the demand was sufficient, 30 per cent – that it was low (a month ago, 56% and 44%).





Compared to the same period of the previous year, as regards the volume of construction works, the trend improved: 35 per cent of the respondents indicated an increase in construction works, 8 per cent – a decrease (a year ago, 32% and 9% respectively).





In August, 16% of the managers expected the number of employees to increase, 8% – to decrease in the coming 3 months (a month ago, 19% and 13% respectively). Expectations for order books (demand) were slightly more optimistic than a year ago: 22% of the respondents expected an increase, 6% – a decrease in the order books (demand) in the coming months (a year ago, 19% and 6 per cent respectively). Most (75%) of respondents expected construction work prices to remain unchanged, 24% – to increase.





Fig. 2. Construction confidence indicator and its components

The survey of retail trade** enterprise managers showed that in August, against July, changes in business trends were moderate. The retail trade confidence indicator was 11, i.e. it remained unchanged for the fourth month in a row.





In August, against July, business situation of retail trade enterprises slightly deteriorated: improvement was indicated by 23, deterioration – 3 per cent of the interviewed (a month ago, 24% and 3% respectively).





However, expectations for the changes in business situation in the coming months were slightly more optimistic than a month ago: 18% of the interviewed expected their business situation to improve, 2% – to deteriorate in the coming months (in July, 17% and 3% respectively). As regards acquisition of goods, expectations remained similar as in the previous month: 21% of the respondents stated that they will acquire more, 7% – fewer goods (in July, 19% and 5% respectively).





Three-fourths of the respondents (75%) did not plan on changing the number of employees, 15% – intended to hire new employees. Most respondents (93%) expected the prices of goods to remain unchanged, 7% – expected them to increase.





Fig. 3. Retail trade confidence indicator and its components



** Including trade in, maintenance and repair of motor vehicles and motorcycles, their parts and accessories.



The results of an opinion survey of service sector enterprise managers showed that in August, against July, the confidence indicator grew by 1 percentage point. This was influenced by improved business situation of the enterprises and more optimistic expectations for service demand in the coming 3 months.





In August, 35 per cent of respondents stated that their business situation improved, 4 per cent – that it deteriorated (a month ago, 35% and 5% respectively). Over the previous months, the number of employees also increased: 39% of the respondents indicated an increase, 13% – a decrease in the number of employees (in July, 36% and 18% respectively). However, the growth rate of service demand slightly decreased: in August, 40% of respondents indicated an increase, 9% – a decrease (a month ago, 40% and 8% respectively).





In August, against July, service demand expectations were also more optimistic: 40% of the respondents expected an increase, 5% – a decrease in service demand (in July, 39% and 6% respectively). In the coming months, 30% of the respondents planned on hiring new employees, while most (59%) of the interviewed did not intend to change the number of employees. An increase in prices of services in short run was expected by 11%, a decrease – 1% of the interviewed.





Fig. 4. Services confidence indicator and its components

Concepts

Balance is an indicator calculated as the difference between positive and negative answers to the questions posed in the questionnaire.

Economic sentiment indicator refers to the weighted arithmetic mean of five components – consumer, industrial, construction, retail trade, and services confidence indicators (their weights making up 20, 40, 5, 5, and 30 per cent respectively).

Services confidence indicator is calculated as a simple arithmetic mean of the balances of the assessment of changes the business situation, the demand for services provided and expected demand.

Industrial confidence indicator is calculated as a simple arithmetic mean of the balances of the assessment of demand, production expectations and the level of stocks (the latter with an inverted sign).

Retail trade confidence indicator is calculated as a simple arithmetic mean of the balances of changes in the business situation, expectations for the business situation and assessment of the level of stocks (the latter with an inverted sign).

Construction confidence indicator is calculated as a simple arithmetic mean of the balances of the assessment of orders for construction works and the employment expectations.

Consumer confidence indicator refers to the simple arithmetic mean of the balances of positive and negative answers to four questions (about changes in the financial situation of the household, the economic situation in the country, the number of the unemployed (with an opposite sign), and the probability of making savings in the coming 12 months).



The survey is partially funded by the EU.

Respective information on other EU countries is available on the European Commission’s website .



The September 2018 business tendency survey results and economic sentiment indicator will be released on 28 September 2018.