All pessimists! Confidence in the economy took a hit in July, falling for the first time in eight months

The economic sentiment indicator fell in July for the first time in eight months.

According to the survey of the Bank of Albania, this indicator fell by 6.5 points for the last month, but still remains significantly above the historical average, 12.4 points above it.

The decline in TNE this month was influenced by the decline in confidence in all sectors of the economy, except for the trade sector, which registered growth.

The industry confidence indicator fell by 4.4 percentage points in July, after having increased since February. However, this indicator remains 14.3 percentage points above the historical average.

The development of the month of July was influenced by the decline in business estimates for both current production and ordering contracts. Industry businesses' expectations for future production have registered a slight increase in July, while expectations for employment and prices they will set in the future are declining.

The construction confidence indicator also recorded a downward turn of 12.1 percentage points in July, ending the upward trend since February. However, its level continues to remain at high levels, 24 percentage points above the historical average.

The decline in confidence in construction was mainly determined by less optimistic estimates of current construction activity. The estimate for the level of orders also registered a decrease, but to a lesser extent. Also, expectations for employment and prices in the future have registered declines.

The indicator of confidence in services fell for the second month in a row, by 10.4 percentage points in July. However, even in this case, its level continues to remain 16.4 percentage points above the long-term average. The main impact on the decline was given by the less optimistic assessments of businesses for the current performance of their activity.

Even the second component, the level of demand, has been estimated to decrease for the month of July. Also, the level of employment and expectations for it in the future are estimated to decrease by service businesses, but nevertheless their expectations for future price developments have increased.

The trade confidence indicator was the only one to register an increase, with 1.6 percentage points in July, reaching the level of 15.6 percentage points above the historical average.

The increase was determined by more optimistic estimates for the current performance of the business. However, the second component of the indicator, expectations for future employment, fell in July. Expectations for future prices were also rated higher.

The consumer confidence indicator registered a decrease of 1.9 percentage points in July, returning to the level of the historical average. The decline reflected the decline in all the constituent components, including purchases in large amounts, expectations about the financial situation and the general economic situation in the future.