Business leaders lost confidence in the future of the markets and their businesses this month, according to data released by the National Bank of Belgium on 23 May.
Different sectors of the Belgian economy have revised their outlooks differently. While the business climate has improved somewhat for industry leaders in the business-related services sector and in industry, the trade and building sector has both revised their forecasts for the months to come.
In total, the confidence index for the business sector dropped slightly by 0.2-0.6 points.
In the trade sector, the more pessimistic prediction was driven by a “marked downward revision of the outlook for demand and orders placed with suppliers. Deteriorating employment forecasts, the National Bank says, have also led to growing hesitance.
The Bank does note, however, that confidence in the motor vehicle distribution sector has risen significantly for the second consecutive month.
In the building and construction sector, pessimistic forecasts have been fuelled by decreased demand forecasts, a low level of current orders, and supply issues.
The small rise in confidence among heads of the business-related services sector has stemmed from increased market demand, a reversal of trends observed in April. Likewise, the manufacturing industry has seen a slight uptake in orders and improved demand expectations.
Unfortunately for many firms, uncertainty caused by the war in Ukraine has placed additional strains onto businesses, not only in energy costs, but access to lines of credit.
In April, 16.5% of firms stated that they perceived growing restrictions in credit terms, up from just 9.9% at the start of the year. This is most notable in the construction sector, where 23% of firms considered that credit was becoming harder to access.