National Bank on the mood in the economy: the real sector is sad, the depression in construction is deepening

The NATIONAL BANK of Belarus released  its September Economic Outlook, with economic sentiment indices for each of the four economic activities surveyed: industry, construction, trade and transport.

The composite index of economic sentiment, calculated on the basis of optimism in industry, construction, trade and transport, was at the level of 2.6% in September against 4.5% in August, 4.3% in July and 8.7% in June this year . The deterioration is largely due to the seasonal factor - seasonally adjusted result in September - minus 0.3% against minus 2.5% in August.

A year ago, there was even less optimism in the economy — minus 5% and minus 7.8%, respectively. At the peak of optimism in 2005-2017, the index reached 24.8%. Its minimum level for this period is minus 22.7%.

The regulator noted the most optimistic feelings and expectations in the industry. The index, which takes into account several key parameters (changes in the physical volume of orders in the domestic and foreign markets, the volume of stocks, expectations of changes in production volumes), in September was at the level of 7.3% (taking into account the seasonal factor - 4%) against 8.8 % in August, and in June reached a double-digit value. For the period 2005-2017, the minimum value of this index was minus 23.4%, the peak of optimism was 23.2%.

The most pessimistic sentiments persist in construction. The economic sentiment index for the industry in September was at minus 17.9%, worsening from month to month even at the height of the construction season (seasonally adjusted index was minus 20.6%). When assessing the mood of builders, changes in the physical volume of work contracts in the country and abroad, as well as the expectation of a change in the number of employees, are taken into account. On all these points, the respondents were pessimistic, and over the past month, negative expectations have intensified on all positions, except for orders outside the country.

The index of economic trade sentiment in September amounted to 7.7%, and seasonally adjusted - 3.3% (0.9% a month ago). When calculating this index, the change in the physical volume of goods not sold for more than three months, the change in the physical volume of trade turnover, as well as the expectation of a change in sales volumes are taken into account.