Business cycle survey - June 2011

Confidence of entrepreneurs higher than confidence of consumers

Overall confidence in domestic economy did not change m-o-m in June. The composite confidence indicator (economic sentiment indicator) remained stable. Confidence of entrepreneurs increased faintly (by 0.3 point m-o-m); confidence of consumers decreased by 1.3 points. Compared to June 2010, the composite confidence indicator is 0.1 point up; if compared to its values during recession (in second half of 2008 and in 2009), it is significantly higher.

Business confidence indicator increased by 0.3 point in June. A slight decline of confidence in industry and construction was balanced by its increase in selected services and in trade. Compared to June 2010, the confidence of entrepreneurs is 3.7 points up. With exception of construction, all branches have already overcome confidence decrease during recession.

In industry, the assessment of current overall economic situation increased slightly. The assessment of current total demand decreased slightly, positive assessment of foreign demand did not change. According to respondents, stocks increased. For next three months, respondents expect a slight improvement of production activity but are cautious about employment. Expectations of general economic situation development for the next three months are almost the same as in May, for next six months they are lower. All in all the confidence in industry decreased by 0.6 point; compared to June 2010 it is 1.4 points up. If compared to its values during recession, confidence in industry is on significantly higher levels and it is also higher than its long-term average.

In construction, the assessment of current economic situation increased m-o-m in June. Low assessment of total demand decreased further, even though the assessment of construction activity did not change. For the period of the next three months respondents expect a decrease in construction activity by almost unchanged employment. Respondents estimate that they have work secured by contracts for 8.2 months ahead. Expectations of the economic situation development for the next three as well as six months are higher than in May. Overall, confidence in construction decreased by 1 point m-o-m (namely due to low assessment of demand) in June and it is 9 points down, y-o-y.

In trade, the assessment of current economic situation in June increased slightly, compared to May. According to respondents, in June, the finished goods stocks decreased. Expectations of the economic situation development for the period of the next three as well as six months are higher than in May. The confidence in trade increased by 3 points, m-o-m; it is 7.3 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation increased compared to May. The assessment of demand decreased compared to May, its expectations for the next three months increased slightly. For next three months, expectations of total economic situation development are slightly higher than in May, for next six they are higher. Overall, the confidence in selected services increased by 1.4 points, m-o-m, to be 8.4 points up y-o-y.

Consumer confidence indicator decreased by 1.3 points compared to May and it is 14.3 points down compared to June 2010. The survey taken among consumers in June indicates that consumers are for the next twelve months more afraid of a decrease in the overall economic situation; in respect to their own financial standing, consumers’ fears are the same as in May. The share of respondents expecting rises in unemployment increased in June. Percentage of respondents planning to save money increased a bit. Respondents again consider present times not convenient for saving and expectations of rise in prices in next twelve months remain high in June.

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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: 20 June 2011
Related publication: 1201-10 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Next News Release: 25 July 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: 24.06.2011
The data are valid as of the release date of the publication.