Business confidence rises 2.6% in the third quarter due to improved expectations

He Harmonized Indicator of Business Confidence (ICEA)whose announcement corresponds to the National Institute of Statistics (INE), grew by 2.6% in the third quarter of this year compared to the second, thus chaining three quarters of growth, which has not happened since the fourth quarter of 2021.

The increase in business confidence recorded for the period July-September is solely a consequence of the improvement of expectations indicators.

Namely, the ratio of expectations (the difference between the opinions of optimistic and pessimistic businessmen) in the third quarter of this year was 5.2 points, the highest since the second quarter of 2019.

This is due to the fact that the percentage of business entities who believe that the progress of their business will be favorable between July and September this year was 22.2%, which is the highest percentage since the third quarter of 2018.

In contrast, those who think that their business will develop unfavorably in the third quarter fell from 17.2% in the previous quarter to 17%, while the share of business people who expect “normal” development of their business decreased. from 62.2% to 60.8%.

Improves perception

for his part, balance sheet (the difference between favorable and unfavorable responses compared to the quarter that ended) improved compared to the previous quarter, from -1.5 points in the second quarter to 6.9 points in the third.

This positive view of the current situation is the result an increase in the number of business entities who consider that their business has progressed favorably in the last three months and the increase of those who believe that he behaved positively.

So for the most recent quarter that has already ended (Q2 2023), ICEA shows that 22.6% of business units have a favorable opinion of how their business performed in those three months, compared to 15.7% of establishments who appreciated the unfavorable development in this period and 61.7% who speak of normality. These percentages in the previous quarter were 19%, 15.7% and 61.7%, respectively.

ICEA, which is published quarterly and is comparable at the European level, is composed of a representative sample of business units.

During the third quarter of this year, business confidence increased in all economic sectors, in all sizes of companies and in all autonomous communities.

Greater trust in transport and hospitality

Thus, according to Statistics, of the five analyzed economic sectors, trust increased the most in the third quarter in traffic and catering (5.1%), followed by construction (3%), trade (2.2%), industry (2.1%) and other services (1.9%).

As for the size of the facilities, confidence has increased in all of them. The biggest improvement in trust occurred in companies with 200 to 999 employees (4.4%) and in those with 10 to 49 workers (2.7%). In companies with less than 10 employees, trust increased by 2.3 percent, in those with 50 to 199 employees and in those with a thousand and more employees, by 2.2 percent and 0.7 percent, respectively.

By community, business confidence increased in all regions, especially in Extremadura (5.2%), Castilla y León (5%), Cantabria (4.9%) and La Rioja (4.7%).

The most moderate increase in business confidence in the third quarter occurred in Murcia (1.5%), Canary Islands and Catalonia (1.1%), Madrid (0.6%) and Castilla-La Mancha, where it increased by 0.2% .

The OECD, the German Ifo and, above all, the Japanese Tankan, which is prepared by the Central Bank of Japan, were taken as a methodological reference for the creation of this indicator.