Business cycle survey - May 2010

Confidence in domestic economy increased slightly m-o-m in May. The composite confidence indicator (economic sentiment indicator) increased by 0.2 point. Among entrepreneurs, confidence increased in industry, construction, trade, and in selected services. Confidence of consumers decreased by 5.2 points, m-o-m. Compared to a low value in May 2009, the composite confidence indicator is 14.4 points up.

Business confidence indicator increased by 1.5 points in May compared to April. Among entrepreneurs, confidence increased in industry, construction, trade, and in selected services. Compared to low values in the last year, the confidence of entrepreneurs is 16.8 points up.

In industry, the assessment of current overall economic situation in May increased slightly compared to April. Assessment of total and external demand improved. According to respondents, stocks increased slightly. Respondents’ expectations regarding production activity in next three moths are higher than in April, expectations of employment are cautious. Expectations of general economic situation for the next three as well as six months are higher than in April. Overall, in May, the confidence in industry increased by 2 points, m-o-m; compared to low values in last year it is 25.3 points up.

In construction, the assessment of current economic situation improved in May compared to April, as well as the assessment of total demand, which still remains low. For the period of the next three months respondents expect a slight improvement of employment and construction activity compared to April. Respondents estimate that they have work secured by contracts for 8.6 months ahead. Expectations of the economic situation development for the period of the next three as well as six months are lower than in April. Overall, the confidence in construction increased by 3.5 points, m-o-m, and it is 2 points down, y-o-y.

In trade, the assessment of current economic situation in May increased, compared to April. According to respondents, in May, the finished goods stocks decreased slightly. Expectations of the economic situation development for the period of the next three as well as six months are lower than in April. In general, the confidence in trade increased by 0.6 point, m-o-m, and it is 4.4 points down y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased slightly in May compared to April. The assessment of demand increased; its expectations for the next three months decreased slightly. For the period of the next three as well as six months expectations of total economic situation are lower than in April. Overall, the confidence in selected services increased by 0.7 point, compared to April; while in the y-o-y comparison it is 12 points up.

Consumer confidence indicator decreased by 5.2 points compared to April, to be 5 points up, compared to low value in May 2009. The survey taken among consumers in May indicates that consumers expect for the next twelve months a decrease in the overall economic situation and their own financial standing. The share of respondents expecting rises in unemployment increased, compared to April. 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: 17 May 2010
End of data processing: 20 May 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 May 2010, the results are in compliance with the programme of business and consumer surveys in the EU processed according to the new CZ-NACE classification (national version of NACE Rev. 2), which replaced the former classification CZ-NACE (OKEČ, the national version of NACE Rev. 1.1). The changes apply to all data except the consumer confidence indicator. Exhaustive information on the introduction of this classification is available at: /csu/czso/klasifikace_ekonomickych_cinnosti_-cz_nace- . The whole time series are recalculated back, data are comparable and available at /csu/czso/kpr_ts .
Since January 2009, 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 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: 24.05.2010
The data are valid as of the release date of the publication.