We have selected two inflation measures (with and without energy) and six survey indicators:
1/ The business confidence, as measured by the PMIs in the manufacturing;
2/ The business confidence in services sectors;
3/ The input prices component of the composite PMI;
4/ The output prices component of the composite PMI (in order to identify direct inflationary pressures);
5/ The suppliers’ delivery times component of the manufacturing PMI (a direct indicator of possible supply difficulties and supply-demand imbalance, and therefore, indirectly, of inflationary pressures in the making);
6/ The household confidence (measured by the “assessment of financial situation in the next 12 months” in order to capture the impact of inflation on purchasing power).
The trends in each of these indicators are observed relative to month m=0, corresponding to the start of the conflict. Each line does not represent the level of the indicator, but its cumulative variation compared to month m=0.
The overall picture from the confidence surveys available for September is globally positive. According to the PMIs, the business climate in services has indeed seen a clear improvement, and that in the manufacturing sector remains comfortably in expansion territory for the 8th month in a row. However, household confidence has recorded its first decline in 5 months, likely driven by rising inflation and concerns over purchasing power. News on the inflation front is negative. PMI surveys report a strengthening of inflationary pressures: this trend is not a surprise given the tensions in energy prices, but it is nonetheless significant. As for inflation itself, it continues to rise, more markedly in September: +0.6 percentage points, to 3.8% year-on-year (Eurostat flash estimate), of which 0.4 pp du to the higher energy contribution. Inflation excluding energy increased as well, by 0.2 pp to 2.3% (of which 0.1 pp due to the rise in food inflation).
