Business cycle survey - February 2010

Confidence of entrepreneurs and consumers recorded an increase

Confidence in domestic economy increased again in February. The composite confidence indicator (economic sentiment indicator) improved by 2.4 points, m-o-m. Among entrepreneurs, confidence increased in industry and in trade, m-o-m; confidence of consumers increased by 1.7 point, m-o-m. Compared to a low value in February 2009, the composite confidence indicator is 17.1 points up.

Business confidence indicator increased by 2.5 points in February compared to January. Among entrepreneurs, confidence increased in industry and in trade, it decreased slightly in selected services, and dropped in construction. Compared to low values in 2009, the confidence of entrepreneurs is 17 points up.

In industry, the assessment of current overall economic situation in February did not change compared to January. Assessment of total and external demand increased. According to respondents, stocks decreased. For the next three months respondents’ expectations regarding production activity increased, those regarding employment decreased slightly. Expectations of general economic situation for the period of the next three as well as six months are higher than in January. Overall, in February, the confidence in industry increased by 5.7 points, m-o-m; compared to very low values in last year it is 30.3 points up.

In construction, the assessment of current economic situation in February decreased slightly compared to January. Low assessment of total demand did not change. For the period of the next three months respondents expect a slowdown in the development of construction activity and employment, compared to January. Respondents estimate that they have work secured by contracts for 8.8 months ahead. Expectations of the economic situation development for the period of the next three months are the same as in January, for next six moths they are lower. Overall, the confidence in construction decreased by 4.5 points, m-o-m, and it is 15.5 points down, y-o-y.

In trade, assessment of current economic situation in February decreased, compared to January. According to respondents, in February, the finished goods stocks decreased. Expectations of the economic situation development for the period of the next three months are slightly higher than in January, for next six months they are the same. In general, the confidence in trade increased by 0.6 points, m-o-m, and it is 3.7 points down on February 2009.

In selected services, according to respondents, the assessment of current economic situation increased in February compared to January. The assessment of demand increased too; its expectations for the next three months decreased. For the period of the next three as well as six months expectations of total economic situation are higher than in January. Overall, the confidence in selected services decreased slightly (by 0.3 points), compared to January; while in the y-o-y comparison it is 8 points up.

Consumer confidence indicator increased by 1.7 points compared to January, to be 17.7 points up, compared to low value in February 2009. The survey taken among consumers in February indicates that, compared to January, consumers expect for the next twelve months an increase in the overall economic situation and a slight improvement in their own financial standing. The share of respondents expecting rises in unemployment decreased, compared to January. 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: 18 February 2010
End of data processing: 22 February 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: 24.02.2010
The data are valid as of the release date of the publication.