Business cycle survey - November 2011

Overall confidence in domestic economy decreased m-o-m in November. The composite confidence indicator (economic sentiment indicator) decreased by 4.3 points compared to October, due to decrease in the confidence of both entrepreneurs and consumers. Confidence of entrepreneurs decreased by 3.4 points, m-o-m; confidence of consumers decreased by 7.7 points, m-o-m. Compared to November 2010, the composite confidence indicator is 7 points down; if compared to its values during recession (at the end of 2008 and in 2009), it is higher.

Business confidence indicator decreased by 3.4 points in November after a m-o-m increase in the previous month. Confidence decreased the most in selected services, decreased in industry and in trade; in construction it decreased slightly and remains very low. The confidence of entrepreneurs is 4.4 points down y-o-y.

In industry, the assessment of current overall economic situation decreased in November. The assessment of current total as well as foreign demand hardly changed. According to respondents, stocks of finished goods increased. For next three months, respondents expect a slowdown in the development of production activity and employment. Expectations of general economic situation development for next three months are lower m-o-m, for next six months they hardly changed. Confidence in industry decreased by 2.3 points; compared to November 2010 it is 7.3 points down.

The survey on investment activity suggests that the level of investment should increase by some 7% in 2011, and slow down to some 4% increase in 2012. Investments will from four fifths flow only to a renewal of production equipment; and lesser funds will be allocated to an extension of production capacities and purchase of new technologies.

In construction, the assessment of current economic situation decreased m-o-m in November. Still low assessment of total demand decreased further. For the period of the next three months respondents expect a slowdown in the development of construction activity by almost stable employment. Respondents estimate that they have work secured by contracts for 7.9 months ahead. Expectations of the economic situation development for the next three months hardly changed, for next six months they are lower. Low confidence in construction decreased by 1 point, m-o-m, to be 5.5 points up y-o-y.

In trade, the assessment of current economic situation in November decreased, compared to October. According to respondents, in November, the stocks hardly changed. Expectations of the economic situation development for the period of the next three as well as six months are lower than in October. Confidence in trade decreased by 4 points, m-o-m, and it is 0.4 point up y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased compared to October. The assessment of demand as well as its expectations for the next three months decreased too. For next three as well as six months, expectations of total economic situation development are lower than in October. Confidence in selected services decreased by 5.3 points, m-o-m, to be 3 points down y-o-y.

Consumer confidence indicator decreased significantly (by 7.7 points) compared to October and it is 17.2 points down compared to November 2010. The survey taken among consumers in November indicates that consumers are for the next twelve months even more 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 in November. Percentage of respondents intending to save money did not change, however, only some 46% of households state that concerning their current financial situation, they save money. Respondents 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: 21 November 2011
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Next News Release: 27 December 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: 24.11.2011
The data are valid as of the release date of the publication.