Business cycle survey - December 2010

Confidence of entrepreneurs and consumers increased again

Overall confidence in domestic economy increased m-o-m in December. The composite confidence indicator (economic sentiment indicator) increased by 3,6 points, due to an increase in both entrepreneurs’ and consumers’ confidence. Confidence of entrepreneurs increased by 3.9 points m-o-m; confidence of consumers increased by 2.5 points. Compared to a low value in December 2009, the composite confidence indicator is 13.5 points up.

Business confidence indicator increased by 3.9 points in December compared to November. Among entrepreneurs, confidence increased the most in industry, then in selected services; it dropped in trade and in construction. Compared to a low value in the last year, the confidence of entrepreneurs is 17.5 points up.

In industry, the assessment of current overall economic situation in December did not change compared to November. The assessment of total demand increased markedly. According to respondents, stocks decreased. For next three months, respondents expect improvement of production activity as well as of employment. Expectations of general economic situation for the next three months however decreased from a high November value, for next six months they hardly changed. All in all the confidence in industry increased significantly (by 6 points); compared to low values in last year it is 26.7 points up.

In construction, the assessment of current economic situation decreased in December compared to November and the low assessment of total demand decreased further. For the period of the next three months respondents expect a slight improvement of construction activity by almost unchanged employment, compared to November. Respondents estimate that they have work secured by contracts for 7.9 months ahead. Expectations of the economic situation development for the next three as well as six months are however slightly higher than in November. Overall, the confidence in construction decreased by 1 point, m-o-m, and it is 11 points down, y-o-y.

In trade, the assessment of current economic situation in December decreased slightly, compared to November. According to respondents, in December, the finished goods stocks decreased. Expectations of the economic situation development for the period of the next three as well as six months are lower than in November. In general, the confidence in trade decreased by 0.6 point, m-o-m, but it is 10 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation increased compared to November. The assessment of demand decreased slightly; its expectations for the next three months increased. For the period of the next three as well as six months expectations of total economic situation are higher than in November. Overall, the confidence in selected services increased by 2.7 points, m-o-m, and it is 11.4 points up y-o-y.

Consumer confidence indicator increased by 2.5 points compared to November, to be 2.5 points down, compared to a relatively high value in December 2009. The survey taken among consumers in December indicates that consumers expect for the next twelve months an improvement in the overall economic situation. Respondents’ expectations according to their own financial standing, unemployment, and plans to save money improved as well, but only slightly.

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: 20 December 2010
End of data processing: 23 December 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 (namely market and financial ones), 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.

Text not edited for language.

Published: 27.12.2010
The data are valid as of the release date of the publication.