October 2007: Business Climate Indicator for the euro area declines further in October

Following a marked decrease in September, the Business Climate Indicator (BCI) for the euro area continued to decline in October. However, in combination with the pick-up in industrial production growth in July and August, the still high level of the indicator suggests that economic activity in the industry sector is continuing to grow at a solid pace.

The decrease in the BCI is largely due to a sharp worsening of industry managers' assessment of the production trend observed in recent months. Managers' assessments of both total and export order books and their views of the stocks of finished products also deteriorated somewhat, while their production expectations remained unchanged.

[ Figures and graphics available in PDF and WORD PROCESSED ]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).

[ Figures and graphics available in PDF and WORD PROCESSED ]
Full details of the Business Climate Indicator are available on the Europa website:

http://ec.europa.eu/comm/economy_finance/indicators/businessclimate_en.htm