Households and non-financial corporations in the euro area: third quarter of 2023

11 January 2024

• Households' financial investment increased at annual rate of 1.9% in third quarter of 2023, after 2.1% in previous quarter
• Non-financial corporations' financing grew at broadly unchanged rate of 0.7%
• Non-financial corporations' gross operating surplus increased at annual rate of 2.2%, after 5.9% in previous quarter

Chart 1

Household financing and financial and non-financial investment

(Annual growth rates)

Chart 2

Data for household financing and financial and non-financial investmentNFC gross-operating surplus, non-financial investment and financing

(annual growth rates)

Data for NFC gross-operating surplus, non-financial investment and financing

Households

Household gross disposable income increased in the third quarter of 2023 at a lower annual rate of 6.4% (after 8.3% in the second quarter), as the main components grew at lower rates: compensation of employees increased at a rate of 6.6% (after 7.0%), and gross operating surplus and mixed income of the self-employed grew at a rate of 6.2% (after 7.4%). Household consumption expenditure increased at a lower rate of 5.0% (after 6.9%).

Household gross saving rate increased to 14.1% in the third quarter of 2023, compared with 13.9% in the previous quarter.

Household gross non-financial investment (which refers mainly to housing) grew at a lower annual rate of 0.9% in the third quarter of 2023, after 1.4% in the previous quarter. Loans to households, the main component of household financing, increased at a lower rate of 1.0% (after 1.8%).

Household financial investment grew at a lower annual rate of 1.9% in the third quarter of 2023, after 2.1% in the previous quarter. Among its components, currency and deposits increased at a lower rate of 0.5% (after 1.6%), while investment in debt securities increased at a higher rate of 61.6% (after 50.0%). Investment in shares and other equity increased at an unchanged rate of 1.0%. Life insurance investment ceased to grow (0% after 0.6%), while investment in pension schemes grew at a broadly unchanged rate of 2.4%.

Household net worth increased at an annual rate of 2.3% in the second quarter of 2023, after 3.1% in the previous quarter. The deceleration was mainly due to lower valuation gains on non-financial assets. Housing wealth, the main component of non-financial assets, grew at a lower rate of 0.9% (after 2.3%). The household debt-to-income ratio decreased to 88.1% in the third quarter of 2023 from 94.3% in the third quarter of 2022.

Non-financial corporations

Net value added by NFCs increased at a lower annual rate of 5.8% in the third quarter of 2023, after 7.6% in the previous quarter. Gross operating surplus grew at a lower rate of 2.2% after 5.9%, while net property income (defined in this context as property income receivable minus interest and rent payable) increased at a higher rate (31.5% after 0.7%). As a result, gross entrepreneurial income (broadly equivalent to cash flow) increased at a higher rate of 5.4% (after 4.5%).^[1]

NFCs’ gross non-financial investment decreased at an annual rate of -9.8% (after increasing by 19.4%) partly due to a strong decrease in other non-financial investments such as inventories.^[2] NFCs’ financial investment grew at a lower annual rate of 1.5%, compared with 1.7% in the previous quarter. Among its components, deposits decreased at a more negative rate (-2.3% after -2.0%). Loans granted grew at a lower rate of 2.1% (after 2.9%), while investment in shares and other equity grew at a higher rate of 1.5% (after 0.7%).

Financing of NFCs increased at a broadly unchanged rate of 0.7%, reflecting mainly a lower growth rate of financing via loans (0.9% after 2.5%)^[3] and a higher growth rate of equity financing (0.3%, after -0.2%).

NFC's debt-to-GDP ratio (consolidated measure) decreased to 68.0% in the third quarter of 2023, from 73.7% in the same quarter of the previous year; the non-consolidated, wider debt measure decreased to 126.5% from 136.1%.

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Notes

• This statistical release incorporates revisions to the data since the first quarter of 2020.
• The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
• The euro area and national financial accounts data of non-financial corporations and households are available in an interactive dashboard.
• Hyperlinks in the main body of the statistical release are dynamic. The data they lead to may therefore change with subsequent data releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
• The ECB published on 8 January 2024 for the first experimental Distributional Wealth Accounts (DWA), which provides additional breakdowns for the household sector. The release of results for 2023Q3 is planned for end-February 2024.