Confidence down slightly in an otherwise solid Belgium.

Overall consumer confidence in Belgium began to decline from October 2006 (the while line in the graph above.) Between October 2006 and November 2006 the decline was mild but it accelerated sharply from November 2006 through December 2006 falling from a plus 1 in November 2006 to a minus 8 in December 2006, the lowest point of the 13 month period of the graph.

Interestingly, the sub index measuring how consumers felt about their own household finances looking forward to March 2008 did not decline nearly as sharply as did the overall confidence rating.

It is also interesting to observe that notwithstanding the sharp drop in consumer confidence in December 2006 a trend line drawn through the plot of the overall confidence indicator (not shown) slopes significantly upward.

Belgium's economy, according to a research brief published on March 22, 2007 by the ING Group, a worldwide financial organization based in Amsterdam, said that Belgium's economic indicators are usually a reliable forecaster of what will happen in the European Union (EU) 13 economies three months in advance.

By this reasoning, since confidence declined from February 2007 (plus 1) to March 2007 (minus 1), the consensus that Europe is facing a slowdown toward the end of 2007 may be correct.

One recent item legislating against this is the annual report from Belgium's National Employment Office saying that unemployment has fallen "sharply," down 2.0 percent in 2006 when compared with 2005. Employment prospects normally energize consumer confidence and spending.

The National Bank of Belgium (NBB), the country's central bank, released its confidence data on March 20, 2007. Consumer expectations in regard to unemployment spiked sharply (to 39 points) at the end of 2006, mirroring the December 2006 crash in confidence depicted in the graph on page one. (A rise in the unemployment indicator indicates a "deterioration" of the expected employment situation.)

The unemployment index recovered quickly in January 2007, falling to 19. It then fell further to 14 in February 2007, but rose to 15 in March 2007.

The point here is that with employment recovering strongly, confidence could also turn around, providing support for consumer spending and economic growth in general.

Other confidence sub indexes not shown on the chart on page one include consumer opinions on the present state of the Belgian economy. In seven out of the ten months of 2006 shown on the page 1 graph, consumer opinions registered negative numbers. The lowest was a negative 7.0 for the first three months of 2006.

In January 2007, Belgian consumers were feeling better about the current economic situation and pushed the sub index up from a minus 7.0 in December 2006 to a minus 1 in January 2007. The index increased further to zero in February 2007, but fell to minus 3.0 again in Mach 2007.

When asked about the capability of their own households to save, consumer responses kept this sub index in positive digits for the entire period of the graph on page 1. In fact, the most positive scores of all four of sub indexes were posted here.

The portrait of Belgian consumers that emerges from this data is of a wary population with a jaundiced eye on job possibilities.

PRODUCT FOCUS: