Business cycle survey - March 2011

Overall confidence in domestic economy decreased again m-o-m in March. The composite confidence indicator (economic sentiment indicator) decreased by 1.9 points, due to a decrease in both entrepreneurs’ and consumers’ confidence. Confidence of entrepreneurs decreased by 0.5 point m-o-m; confidence of consumers decreased by 7.5 points. Compared to a low value in March 2010, the composite confidence indicator is 6.5 points up.

Business confidence indicator decreased by 0.5 point in March. Among entrepreneurs, confidence decreased the most in trade; confidence decreased also in industry and in construction. In selected services, confidence increased. Compared to a low value in March 2010, the confidence of entrepreneurs is 10.1 points up.

In industry, the assessment of current overall economic situation increased slightly. Relatively high assessment of total and foreign demand decreased further in March. According to respondents, stocks decreased. For next three months, respondents expect a decrease in production activity growth and a slight decrease in employment. Expectations of general economic situation development for the next three as well as six months are also lower than in February. All in all the confidence in industry decreased by 3 points; compared to low values in March 2010 it is however 14.3 points up.

In construction, the assessment of current economic situation did not change in March. Low assessment of total demand decreased a bit. For the period of the next three months respondents expect an increase in construction activity without an increase in employment, compared to February. Respondents estimate that they have work secured by contracts for 7.6 months ahead. Expectations of the economic situation development for the next three as well as six months are higher than in February. Overall, the confidence in construction decreased by 2 points and it is 10.5 points down, y-o-y.

In trade, the assessment of current economic situation in March decreased, compared to February. According to respondents, in March, the finished goods stocks increased. Expectations of the economic situation development for the period of the next three months are almost the same as in February, for next six months they are lower. In general, the confidence in trade decreased by 3.3 points, m-o-m, after pervious rise; it is 3.7 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation increased markedly compared to February, namely in financial services and real estate activities. The assessment of demand did not change; its expectations for the next three months increased. For the period of the next three months expectations of total economic situation development are lower than in February, for next six months they are higher. Overall, the confidence in selected services increased by 3.7 points, m-o-m, and it is 9 points up y-o-y.

Consumer confidence indicator decreased markedly (by 7.5 points) compared to February, to be 8 points down compared to March 2010. The survey taken among consumers in March indicates that consumers are for the next twelve months afraid of a decrease in the overall economic situation as well as in their own financial standing. The share of respondents expecting rises in unemployment increased slightly in March. Percentage of respondents planning to save money did not change after previous drop. Respondents in March also expect rise in prices in next twelve months.

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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: 18 March 2011
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Next News Release: 26 April 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: 24.03.2011
The data are valid as of the release date of the publication.