Belgian January Business Confidence Drops on ManufacturingJohn Martens
Belgian business confidence unexpectedly fell in January for the first time in three months amid deteriorating sentiment in the manufacturing industry because of weakening orders.
The confidence index for Belgium decreased to minus 13.2 from minus 11.8 in December, the Brussels-based National Bank of Belgium said today in a statement. Economists had predicted an increase to minus 11, according to the median of 16 forecasts in a Bloomberg News survey.
“The level of confidence is now compatible with another quarter of recession,” said Philippe Ledent, an economist at ING Groep NV in Brussels, in an e-mailed note. “This could be the sign of a new deterioration of activity in the euro zone, as the Belgian indicator is often considered as a good leading indicator.”
While business sentiment improved in Belgium’s trade and business-related services industry, executives in the manufacturing industry signaled a drop in both domestic and export orders and also pared their forecasts for future demand and employment. The capacity utilization rate in Belgium’s manufacturing industry fell for a fourth straight quarter, reaching 75.6 percent in January, according to the central bank.
ArcelorMittal, the world’s largest steelmaker, said today that it plans to permanently shut down six finishing lines and a coke plant in Belgium’s Liege region, eliminating about 1,300 positions, because of a drop in demand for steel in Europe. Demand has fallen a further 8 percent to 9 percent since October 2011 and is now 29 percent below pre-crisis levels, the Luxembourg-based company said.
In Germany, Europe’s largest economy and one of Belgium’s biggest trading partners, business sentiment is forecast to increase in January for a third straight month. The Ifo institute’s business climate index, based on a survey of 7,000 executives, probably advanced to 103 from 102.4 in December, according to the median of 33 estimates in a Bloomberg survey.
The Munich-based Ifo is scheduled to publish the indicator tomorrow at 10 a.m.