Business cycle survey - January 2011

Overall confidence decreased slightly after previous rise

Overall confidence in domestic economy decreased slightly m-o-m in January. The composite confidence indicator (economic sentiment indicator) decreased by 0.3 points, due to a slight decrease in both entrepreneurs’ and consumers’ confidence. Confidence of entrepreneurs decreased a bit (by 0.2 point) m-o-m; confidence of consumers decreased by 0.5 point. Compared to a low value in January 2010, the composite confidence indicator is 11.6 points up.

Business confidence indicator decreased after a marked increase in December by 0.2 point. Among entrepreneurs, confidence increased in trade and in construction, it did not change in industry and decreased slightly in selected services. Compared to a low value in January 2010, the confidence of entrepreneurs is 14.2 points up.

In industry, the assessment of current overall economic situation as well as of total demand increased in January compared to December. According to respondents, stocks increased a bit. Production capacity utilization in manufacturing industry decreased slightly in January and reached 82.3%; respondents estimate they have work secured by contracts for 7.2 months, which is more than in the previous quarter. Most important barrier of production still is insufficient demand, even though compared to previous quarter it is stated by less respondents (40.3%). For next three months, respondents expect similar pace of production activity and increase in employment. Expectations of general economic situation development for the next three months increased in January, for next six months they did not change. All in all the confidence in industry did not change; compared to low values in January 2010 it is 23 points up.

In construction, the assessment of current economic situation increased slightly in January compared to December as well as the low assessment of total demand did. For the period of the next three months respondents expect an improvement of employment by roughly the same development of construction activity, compared to December. Respondents estimate that they have work secured by contracts for 7.6 months ahead. Expectations of the economic situation development for the next three months are lower than in December, for next six months they hardly changed. Overall, the confidence in construction increased by 6 points, m-o-m, and it is 7.5 points down, y-o-y.

In trade, the assessment of current economic situation in January increased, compared to December. According to respondents, in January, 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 December. In general, the confidence in trade increased by 1 point, m-o-m, and it is 10 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation increased slightly compared to December. The assessment of demand as well as its expectations for the next three months decreased. For the period of the next three months expectations of total economic situation development are slightly higher than in December, for next six months they are lower. Most important barrier of production still is insufficient demand (it was stated by 26.6% of respondents). Overall, the confidence in selected services decreased by 1.7 points, m-o-m; it is 6.7 points up y-o-y.

Consumer confidence indicator decreased by 0.5 point compared to December, to be 1.7 points up compared to January 2010. The survey taken among consumers in December indicates that consumers expect for the next twelve months a slight decrease in the overall economic situation as well as in their own financial standing. The share of respondents expecting rises in unemployment hardly changed in January. Percentage of respondents planning to save money increased.

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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 January 2011
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Next News Release: 22 February 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: 25.01.2011
The data are valid as of the release date of the publication.