The Harmonized Indicator of Job Confidence ICEA, published alongside the National Institute of Statistics, fell by 2.9% in the fourth quarter compared to the prior quarter. This dip contrasts with a 7.5% rise seen during the summer months.
The drop in business confidence in the fourth quarter stems from a deterioration in both the expectations indicator and the current state indicator. Elevated inflation, high raw material costs, and rising interest rates have all weighed on sentiment, set against the backdrop of the war in Ukraine.
Specifically, the balance of expectations—the gap between optimistic and pessimistic views among business leaders—stood at -11.8 points, versus a -4.2 point decline in the previous quarter.
More precisely, the share of business organizations predicting positive progress for their operations between October and December this year was 15.5%, lower than the previous quarter’s 19.6%. Meanwhile, entrepreneurs who expect negative development rose from 23.8% to 27.3% quarter over quarter.
At the same time, the percentage of entrepreneurs who foresee normal business activity increasing to 57.2%, up from 56.6% in the prior quarter, indicates a nuanced outlook where some segments anticipate steadiness even as overall confidence weakens.
worsens the perception of the situation
Looking at the current assessment, the balance score—the difference between positive and negative responses compared to the last quarter—improved by just over three points from the third quarter to the fourth. It moved from 1.3 points in the third quarter to -2.3 points in the fourth.
This increasingly negative view of the present environment aligns with fewer firms reporting a positive development in the last three months and a modest drop in those perceiving positive outcomes. Businesses increasingly gauge that conditions have become tougher, reflecting broader macro pressures such as inflation and financing costs that ripple through investment plans and employment expectations. [Attribution: INE]