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Carolina Nunes

29 June 2023
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2023
Details
Abstract
This box analyses sentiment indices of profits and investment that have been compiled from a new data source, namely earnings call transcripts of listed euro area firms. It shows that these data series have correlated well with standard investment and profit series over the past two decades. It also demonstrates that profit sentiment has improved since the third quarter of 2021, while corporate investment sentiment rose slightly further in the second quarter of 2023, despite tightening financing conditions. At the sectoral level, profit sentiment in the services and utilities sectors has held up better than it has in the manufacturing sector since last year. In addition, an indicator of financial risk extracted from the earnings call data shows that firms are highly concerned about rising financing costs and perceive tighter financing conditions as a clear risk.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E30 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→General
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles