Economic situation slightly less positive

The economic picture at the end of July was slightly less positive than at the end of June, but the heart of the indicators in the Business Cycle Tracer is still located firmly in the high economic growth stage. All indicators in the Tracer perform better than their long-term average. Manufacturing output and producer confidence dropped marginally. The decline in the number of bankruptcies was less substantial. As a result, these indicators shifted towards the orange quadrant, compared to June.

In the first quarter, the volume of the gross domestic product (GDP) was 2.5 percent up on one year previously. However, the first quarter of 2007 had one working day fewer than the same period in 2006. After adjustment for seasonal effects, GDP volume grew by 0.9 percent compared with the fourth quarter.

Consumers remained optimistic in July, though consumer confidence fell slightly. The mood indicator among manufacturers has remained consistently high for a year now. The number of the business service providers expecting to receive more orders and to generate a higher turnover in the third quarter of this year exceeds those anticipating a decline.

Manufacturing production in May was 2 percent up on last year. Output growth was distinctly lower than in the first months of this year. After correction for working day effects, the volume of exports of goods was 9 percent up on May 2006. Household spending has risen with 1.2 percent in May, after correction for prices and shopping days. Spending on durable consumer goods rose only marginally, after a strong increase in preceding months.

The capital market interest rate increased further and stood at 4.6 percent in June. Inflation declined by 0.1 percentage point and averaged 1.7 percent. In June, selling prices in the manufacturing industry were 3.2 percent up on June 2006.

In the period April-June, the seasonally adjusted unemployment figure stood at 353 thousand. In the first quarter, there were 212 thousand job vacancies and a continuous rise in the number of hours worked in temp jobs. In the fourth quarter, there was a continuous rise in the number of jobs.

Gross domestic product (GDP)