Business cycle survey - January 2010

Confidence in domestic economy increased again in January, owing, however, only to an increase in confidence of entrepreneurs. The composite confidence indicator (economic sentiment indicator) improved by 2.2 points, m-o-m. Among entrepreneurs, confidence increased in industry, construction, trade, and selected services, m-o-m; confidence of consumers decreased m-o-m. Compared to a low value in January 2009, the composite confidence indicator is 11.4 points up.

Business confidence indicator increased by 4.1 points in January compared to December. Among entrepreneurs, confidence increased in industry, construction, trade, and in selected services. Compared to low values in previous year, the confidence of entrepreneurs is 10.8 points up.

In industry, the assessment of current overall economic situation in January improved compared to December. Assessment of total and external demand increased, too. According to respondents, stocks increased. Production capacity utilization in manufacturing industry reached 78.4%. Respondents estimate they have work secured by contracts for 6.4 months ahead. For the next three months respondents’ expectations regarding production activity and employment increased. Expectations of general economic situation for the period of the next three as well as six months are slightly lower than in December. Overall, in January, the confidence in industry increased by 3 points, m-o-m; compared to low values in last year it is 21.6 points up.

In construction, the assessment of current economic situation in January decreased slightly compared to December. Assessment of current total demand decreased too. For the period of the next three months respondents expect an improvement in the development of construction activity and employment, compared to December. Respondents estimate that they have work secured by contracts for 8.7 months ahead. Expectations of the economic situation development for the period of the next three as well as six moths are higher than in December. Overall, the confidence in construction increased by 4 points, m-o-m, and it is 19.5 points down, y-o-y.

In trade, assessment of current economic situation in January increased, compared to December. According to respondents, in January, the finished goods stocks did not change. Expectations of the economic situation development for the period of the next three as well as six months are higher than in December. In general, the confidence in trade increased by 4.7 points, m-o-m, and is 3.6 points down on January 2009.

In selected services, according to respondents, the assessment of current economic situation hardly changed in January compared to December. The assessment of demand increased as well as its expectations for the next three months. For the period of the next three as well as six months expectations of total economic situation are higher than in December. Overall, the confidence in selected services increased by 5.3 points, compared to December; while in the y-o-y comparison it is 3.6 points up.

Consumer confidence indicator decreased by 4.7 points compared to December, to be 14.3 points up, compared to low value in January 2009. The survey taken among consumers in January indicates that, compared to December, consumers expect for the next twelve months a decrease in the overall economic situation as well as in their own financial standing. The share of respondents expecting rises in unemployment increased, compared to December. The percentage of respondents planning to save money decreased.
Note
Contact: Marie Hörmannová, phone (+420) 274052049,
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 January 2010
End of data processing: 22 January 2010
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
(Publications available also at /csu/czso/katalog-produktu )

Methodological explanatory notes :
Since January 2009, the balance of consumer confidence indicator is seasonally adjusted. Time series of consumer and composite confidence indicators are recalculated back and the data are comparable.
Since January 2006, the composite confidence indicator (economic sentiment indicator) is in compliance with the EU methodology presented as a weighted average of seasonally adjusted confidence indicators in industry, construction, trade, selected services and seasonally non-adjusted consumer confidence indicator. Composite business confidence indicator is a weighted average of seasonally adjusted confidence indicators in industry, construction, trade and selected services.
Since January 2006, due to the inclusion of confidence indicator in selected services, a new weighting system has been used : confidence indicator in industry is assigned the weight of 40%, in construction and trade 5% each, in services 30%, and consumer confidence indicator is assigned the weight of 20%. Indicators are presented as basic indices, the base being the average of 2005. Time series of composite and business confidence indicator are recalculated, using the new weighting system – back to May 2002 (the beginning of the business cycle survey in selected services). The whole time series of base indices are then re-based to the average of 2005; the data are comparable.

Published: 25.01.2010
The data are valid as of the release date of the publication.