Business confidence weakens in Belgium in July

• After several months of near stability, the business confidence indicator dropped to a level close to that recorded in February.
• The downturn was most pronounced in the manufacturing industry and in business-related services. A downswing was also seen in the indicator for trade, albeit to a lesser degree. In contrast, confidence in the business climate improved in the building industry.
• The capacity utilisation rate in the manufacturing industry rose slightly.

In the manufacturing industry, business leaders were more negative in their assessments of the current level of total order books, and also assessed stock levels less favourably. Moreover, their employment expectations worsened again, after having risen robustly last month. Conversely, demand expectations improved significantly this month.

In business-related services, there was a gloomier assessment of current activity in contrast to last month, with business leaders exhibiting much more caution regarding their activity expectations.

In trade, more pessimism concerning suppliers’ intentions to place orders and worsened demand expectations were partly offset by a significant improvement in employment expectations.

In the building industry, the modest rise recorded this month was mainly due to a sharp improvement in the assessment of order books, even though the trend in orders was assessed more negatively for the current season. The overall synthetic smoothed curve, which reflects the underlying economic trend, is leaning towards a stabilisation. Finally, the results of the quarterly manufacturing capacity survey point to a slight increase in the capacity utilisation rate quarter-on-quarter. The seasonally adjusted capacity utilisation rate thus rose from 73.8% in April to 74.2% in July

Source: National Bank of Belgium
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