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UPDATE 1-Belgian business sentiment unexpectedly dips in October
October 23, 2013 / 1:21 PM / 4 years ago

UPDATE 1-Belgian business sentiment unexpectedly dips in October

(Adds economist comment)

BRUSSELS, Oct 23 (Reuters) - Belgian business sentiment, a bellwether for the euro zone, ended three months of improvement in October, as confidence among managers in manufacturing and construction subsided.

The business confidence index, often referred to as the leading indicator, dropped to -7.7 from -6.7 in September after three consecutive months of increase, the central Bank said on Wednesday.

A Reuters poll of 14 economists had produced a median forecast of -6.0, with a range from -7.0 to -5.0.

The deterioration in manufacturing was mainly due to high levels of inventories and a less favourable outlook for order books. In construction, the decline was chiefly due to gloomier demand prospects.

Steven Vanneste, economist at BNP Paribas Fortis, said the figures were only a dip in an otherwise improving trend after strong growth in business sentiment over the past months.

“If you look at manufacturing, the evolution of order books has deteriorated but demand expectations are rising further,” he said.

The trade component, largely reflecting retail demand, rose for the fifth straight month, based on an expected growth of orders placed with suppliers.

The Belgian number comes two days before the closely watched German Ifo business climate index, which is expected to push to 108.0 points, slightly beyond September’s 17-month high of 107.7.

Belgian consumer sentiment, released last Friday, rose to its highest level since July 2011 in October.

Belgium’s economy, which grew by 0.2 pct in the second quarter compared to the first, is expected to stagnate for the whole of 2013 and grow by about 1 percent in 2014.

Belgium, the euro zone’s sixth largest economy and one of its most open, exports a large number of semi-finished products to the region’s most powerful economy, Germany, whose exports have pulled it clear of the stagnation hitting its neighbours. (Reporting by Robert-Jan Bartunek and Philip Blenkinsop)

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