Mixed Bag for Belgian Confidence Indicator

Belgian consumer confidence in the National Bank of Belgium consumer survey slipped to -7 in August from -6 in July. However, that is still slightly better than the June reading of -9. The queue standing of the consumer confidence metric on data back to 1991 places the indicator at a 48.3 percentile, marking it is just slightly below its median reading over that period. Tracking Belgian consumer confidence since January 2020 before Covid started, the indicator is one point lower than it was prior to the onset of the Covid episode.

The economic situation over the next 12 months for Belgium is assessed as weaker at -17 compared to -13 in July and -15 in June. The readings from 12 months ago and 6 months ago showed that there had been some improvement and that there was backtracking over 3 months, but the current reading is still slightly better than the reading from 3 months ago. However, the standing for the August reading is at its 25th percentile right at the border of the lowest quartile of its queue of data since 1991, not a very impressive result. The economic situation has a stronger diffusion index than the assessment over the last 12 months; however, the percentile standing for the next 12 months is weaker than it was for the last 12 months; the previous 12 months had a standing in its 30th percentile.

The trends for the next 12 months have a -1 diffusion reading which is a reading showing higher price pressure than in June or July. However, the longer progression for prices from 12-months to 6-months to 3-months shows expected pressure being relieved. And the standing for price trends in August is only at the 4th percentile, an extremely weak reading of expected inflation. This compares to the last 12 months where the reading had a massive 96-percentile standing.

Unemployment expectations according to the survey are going up. The response for June was +17 and July settled back at a + 15, but August sees a reading of +20. The progression from 12-months to 6-months to 3-months is flat but with a small uptick to +18 from +16 one year ago. The percentile standing for the unemployment gauge in August is at a 40.8 percentile; unemployment expectations are still below their median.

Household purchasing assessments slipped for both the next 12 months and in the current period. Apart from the month-to-month changes, the 12-month, to 6-month, to 3-month metrics show slight slippage in both of those categories. The environment for household purchases over the next 12 months, however, has a 66.6 percentile standing, at the border of the top third of its historic queue of data. The favorability of buying at present has only a 6.2 percentile standing, extremely weak.

The financial situation for households over the last 12 months were range-bound oscillations over 6 months and 3 months, but those reading in August now have a lower 5.9 percentile standing. Over the next 12 months, the August reading is near its median with a 49.3 percentile standing; August shows a net assessment at zero, the same as it was in July. Twelve-months ago this assessment was -8 with improvement in train, very weak. The outlook is for something much better. The standing for the household financial situation currently has improved sharply from this lower 5.9 percentile over the last 12 months, to a standing of 49.3% over the next 12 months. The current situation standing is at its 86th percentile.

The environment for household savings is positive over the next 12 months; the assessment has a 65.8 percentile standing. The favorability for savings at present has a 73.7 percentile standing. However, favorability of saving responses often reflect negativity on the outlook. If it's favorable to save, it's often not favorable to spend. And we see that less in the outlook for the next 12 months and more in the current assessment of conditions.

The National Bank of Belgium consumer survey shows little change over the last three months and a slight downtick month-to-month. The broader change from 12-months to 6-months to 3-months shows very slight improvement as consumer confidence overall has been hovering around its historic median level. Consumers are optimistic that price pressures are going to be subdued, but they are becoming more worried about unemployment prospects.