24 May 2018

2018- n° 132

In May 2018, the business climate weakens sharply in services Monthly survey of services - May 2018

According to business managers surveyed in May 2018, the business climate in services has weakened sharply. The business climate composite indicator has lost four points, returning to its level of June 2017 (103). However, it stands above its long-term average (100).

For the first time since August 2016, the turning point indicator stands in the area indicating an unfavourable short-term economic situation.

The balance of opinion on expected activity has fallen just below its long-term average. That on past activity has sharply declined too and has returned to its average, that is its lowest level since June 2017. The balance on general outlook, which relates the assessment of business leaders over their whole sector, has also deteriorated but still stands well above its average. That on expected demand has slightly weakened while remaining above its average.

The balances on employment have declined again. While that on expected employment is clearly above its average, that on past employment has moved below it.

However, the business leaders remain upbeat about investment. The balance on planned investments holds steady whereas that on past investments has grown sharply. Both are above their average.

The business climate composite indicator is above its average in all sub-sectors except in real estate activities. It has decreased in accommodation and food service activities, information-communication, professional, scientific and technical activities, and in administrative and support service activities. The climate is stable in road transport and it has improved a little in real estate activities.

In road transport, the business climate indicator is stable after a sharp decline last month. At 110, it is well above its average level. The fall in the balance of opinion on past activity is offset by the rebound in the balances on employment. All balances are markedly above their average.

The climate in accommodation and food services has lost six points. Nevertheless, at 106, it remains clearly above its long-term average. This downturn is driven by the marked decrease in the balances on activity, on expected demand and on general outlook, probably due in part to the strikes in transports.

In information and communication, the business climate has lost one point (101) and stands slightly above its average level. The balances on activity, on expected demand and past employment have decreased. The balances on employment and general outlook remain above their long-term average.

In real estate activities, the climate has gained two points (87) but stands well below its long-term average. In particular, the balances on past activity and on past employment have improved. However, all the balances of opinion except that on employment stand below their average.

The business climate in professional, scientific and technical activities has lost four points (105) but still stands above its long-term average. All the balances of opinion have declined, except that on past activity. However, they all remain above to their average.

In administrative and support service activities, the climate has lost three points. At 108, it stands well above its long-term average. All the balances have fallen, in particular those on activity. The balance on past activity has returned to its average, that on past employment remain below it. The other balances are above their average.