Economic sentiment deteriorates in July
The beginning of the third quarter of 2024 shows signs of weakness. In July, the Economic Sentiment Indicator (ESI) declined in all CEE countries, and consumers lost some confidence as well. Looking across sectors, we also see deterioration in market sentiment. In the retail sector, the drop is quite visible since July's average value of the indicator in CEE8 is the lowest compared to quarterly averages since the beginning of 2023. The services sector also lost momentum that could be observed at the beginning of the year. The sentiment indicator in the industry has been rather flat since the beginning of the year. Additionally, according to PMI indices, the manufacturing sector is in the contraction zone region-wide as July's footprints are below the threshold of 50 in every CEE country that published the PMI index. Moreover, in Romania, it declined to 47.8 in July, following three consecutive months at or above the 50 no-change mark, and in Czechia to 43.8 as output and new orders declined. On the other hand, in Poland, the PMI index increased to 47.3 from 45 in June, and in Hungary, the increase was rather marginal to 49.2 from revised June's footprint at 49.1.