According to a recent economic sentiment survey conducted by IOBE, the latest downturn is primarily attributed to weakened expectations within the industrial sector and a decline in consumer confidence, whereas other sectors demonstrate either stabilization or improvement.
“The economy is clearly navigating a phase of heightened uncertainty, particularly in the international arena. The industrial sector, due to its greater exposure to global developments such as trade protectionism and related agreements, has been disproportionately impacted.
Conversely, the resilience of domestic consumption, positive expectations for robust tourism inflows, and a substantial backlog of projects in the construction sector contribute to a more optimistic outlook for the services, retail, and construction industries,” the report highlights.
Nonetheless, consumer sentiment remains subdued. Household forecasts regarding their financial situation over the next 12 months have deteriorated, with 56% of respondents anticipating a slight or marked decline, compared to a mere 6% expecting some improvement.
Expectations concerning the country’s overall economic condition have also worsened in 2025, with 61% forecasting a downturn and 25% expecting stability. Despite the ongoing steady economic recovery and improved employment figures, households express considerable concern over prospects for real income growth and potential economic challenges ahead.
Key sectoral insights include:
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Industry: The negative outlook on orders and demand has marginally deepened; inventory levels have edged higher, while positive production forecasts for the near term have slightly contracted.
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Construction: Slightly negative expectations regarding business activity have shifted to a positive stance, alongside a modest rise in employment optimism.
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Retail Trade: Current sales assessments have improved markedly, inventories remain stable, though short-term sales projections have softened marginally.
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Services: Positive evaluations of current business conditions and demand have shown modest gains, yet short-term demand forecasts have decreased sharply.
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Consumer Confidence: Negative household outlooks for both national economic conditions and personal finances have intensified. Additionally, forecasts for major purchases have weakened, and intentions to save have diminished.
