Business cycle survey - June 2010

Overall confidence increased slightly

Confidence in domestic economy increased slightly m-o-m in June. The composite confidence indicator (economic sentiment indicator) increased by 0.6 point. Confidence of entrepreneurs decreased slightly, namely in all branches excluding industry. Confidence of consumers on the contrary increased (by 3.5 points), m-o-m. Compared to a low value in June 2009, the composite confidence indicator is 14.9 points up.

Business confidence indicator decreased slightly (by 0.2 point) in June compared to May. Among entrepreneurs, confidence increased only in industry; in construction, trade, and in selected services it decreased slightly. Compared to low values in the last year, the confidence of entrepreneurs is 16.2 points up.

In industry, the assessment of current overall economic situation in June increased slightly compared to May as well as the assessment of total and external demand. According to respondents, stocks did not change. For next three months, respondents expect no changes in production activity and increase in employment. Expectations of general economic situation for the next three months are slightly lower than in May, for next six months they are higher. Overall, in June, the confidence in industry increased by 0.3 point, m-o-m; compared to low values in last year it is 21.3 points up.

In construction, the assessment of current economic situation improved slightly in June compared to May. Assessment of total demand is still low. For the period of the next three months respondents expect a slight improvement of employment as well as construction activity compared to May. Respondents estimate that they have work secured by contracts for 8.8 months ahead. Expectations of the economic situation development for the next three months are slightly lower than in May, for next six months they are higher. Overall, the confidence in construction decreased by 1 point, m-o-m, and it is 2 points down, y-o-y.

In trade, the assessment of current economic situation in June decreased, compared to May. According to respondents, in June, the finished goods stocks decreased too. Expectations of the economic situation development for the period of the next three as well as six months are however higher than in May. In general, the confidence in trade decreased by 0.3 point, m-o-m, and it is the same y-o-y.

In selected services, according to respondents, the assessment of current economic situation and the assessment of demand decreased in June compared to May. Expectations of demand for the next three months increased. For the period of the next three months expectations of total economic situation are slightly higher than in May, for next six months they are lower. Overall, the confidence in selected services decreased by 0.7 point, compared to May; while in the y-o-y comparison it is 15 points up.

Consumer confidence indicator increased by 3.5 points compared to May, to be 9.5 points up, compared to low value in June 2009. The survey taken among consumers in June indicates that consumers expect for the next twelve months an increase in the overall economic situation and a slight decrease in their own financial standing. Marked share of respondents expecting rises in unemployment decreased, compared to May. The percentage of respondents planning to save money decreased too.
Note
Contact: Marie Hörmannová, phone (+420) 274052049,
e-m ail: 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 June 2010
End of data processing: 22 June 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 ind icator) 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: 24.06.2010
The data are valid as of the release date of the publication.