IP/06/1081
Brussels, 31st July 2006
July 2006: Business Climate Indicator for the euro area declines slightly After a sharp increase in June, the Business Climate Indicator (BCI) for the euro area declined slightly in July. Regardless of this recent weakening, the BCI remains at a very high level, last achieved in 2000. The high level of the BCI together with the rebound in industrial production registered in May, suggests that industrial production growth has accelerated in the second quarter of 2006 and should remain buoyant in the third quarter.
The decrease in the BCI was mainly due to a drop in industry managers' assessment of the production trend observed in recent months. While the assessment of total order books and production expectations for the months ahead improved, managers' views regarding export order books and the stocks of finished products remained unchanged.
[Graphic in PDF & Word format]
The BCI is based on a factor analysis of the euro area aggregate balances (seasonally adjusted) of five of the monthly questions in the industry survey (only employment and selling-price expectations are excluded).
[Graphic in PDF & Word format]
Full details of the Business Climate Indicator are available on the Europa website:
http://ec.europa.eu/economy_finance/indicators/businessclimate_en.htm
The next BCI Results are due to be published on 31 August 2006.
