Business cycle survey - August 2011

Overall confidence in domestic economy decreased m-o-m in August. The composite confidence indicator (economic sentiment indicator) decreased by 1.3 point. Confidence of entrepreneurs decreased by 1 point, m-o-m; confidence of consumers decreased by 2.7 points, m-o-m. Compared to August 2010, the composite confidence indicator is 3.3 points down; if compared to its values during recession (in second half of 2008 and in 2009), it is still higher.

Business confidence indicator decreased by 1 point in August. Confidence decreased in industry and in selected services; in construction it did not change, and in trade it increased. Compared to August 2010, the confidence of entrepreneurs is 1.4 point down. With exception of construction, the confidence in all surveyed branches is higher than during recession.

In industry, the assessment of current overall economic situation decreased in August. The assessment of current total demand decreased as well, positive assessment of foreign demand did not change. According to respondents, stocks increased slightly. For next three months, respondents expect no changes in production activity and employment. Expectations of general economic situation development for the next three months are lower than in July, for next six months they are the same. All in all the confidence in industry decreased by 1.7 point; compared to August 2010 it is 3.7 points down. If compared to its values during recession, confidence in industry is still significantly higher and also exceeds its long-term average.

In construction, the assessment of current economic situation hardly changed m-o-m in August. Still low assessment of total demand improved a bit. For the period of the next three months respondents expect a slight worsening in the development of construction activity and lower employment. Respondents estimate that they have work secured by contracts for 8.4 months ahead. Expectations of the economic situation development for the next three as well as six months are slightly better than in July. Overall, confidence in construction did not change m-o-m in August and it is 5 points down, y-o-y.

In trade, the assessment of current economic situation in August did not change, compared to July. According to respondents, in August, the finished goods stocks decreased. Expectations of the economic situation development for the period of the next three months are higher than in July, for next six months they are lower. The confidence in trade increased by 3.7 points, m-o-m and it is 5.7 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased compared to July as well as the assessment of demand. Its expectations for the next three months however increased. For next three months, expectations of total economic situation development are the same as in July, for next six months they are higher. Overall, the confidence in selected services decreased by 1 point, m-o-m, to be 1.3 point up y-o-y.

Consumer confidence indicator decreased by 2.7 points compared to July and it is 11.2 points down compared to August 2010. The survey taken among consumers in August indicates that consumers are for the next twelve months still afraid of a decrease in the overall economic situation as well as of their own financial standing. The share of respondents expecting rises in unemployment increased markedly in August. Percentage of respondents planning to save money decreased a bit. Respondents again consider present times not convenient for saving and are still afraid of rises in prices.

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Note
Responsible manager: Juraj Lojka, director
Contact person: Marie Hörmannová, tel. +420274052049, e-mail: marie.hormannova@czso.cz
Data source: CZSO business survey, GfK Praha consumer survey
Business and Consumers Surveys are co-financed by grant agreements
of the European Commission DG ECFIN
End of data collection: 19 August 2011
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Next News Release: 26 September 2011
Not edited for language

Note: Long term average is usually calculated over the period from 1990, if harmonised data are available (for the Czech Republic, it is an average since 1993).

Published: 24.08.2011
The data are valid as of the release date of the publication.