Business cycle survey - September 2010

Confidence of entrepreneurs and consumers decreased slightly

Confidence in domestic economy decreased slightly m-o-m in September. The composite confidence indicator (economic sentiment indicator) decreased by 1 point, due to both business and consumer confidence indicators. Confidence of entrepreneurs decreased slightly (by 0.9 point), confidence of consumers decreased by 1 point, m-o-m. Compared to a low value in September 2009, the composite confidence indicator is 13.7 points up.

Business confidence indicator decreased by 0.9 point in September compared to August. Among entrepreneurs, confidence increased slightly in selected services; it decreased in industry, construction as well as and in trade. Compared to low values in the last year, the confidence of entrepreneurs is 17.2 points up.

In industry, the assessment of current overall economic situation in September did not change compared to August as well as the assessment of total demand. According to respondents, stocks decreased. For next three months, respondents expect slowdown of production activity by improved employment. Expectations of general economic situation for the next three as well as six months are lower than in August. Overall, in September, the confidence in industry decreased by 1 point, m-o-m; compared to low values in last year it is 18 points up.

In construction, the assessment of current economic situation decreased in September compared to August as well as the assessment of total demand. For the period of the next three months respondents expect a slowdown of construction activity and a decrease in employment, compared to August. Respondents estimate that they have work secured by contracts for 8.6 months ahead. Expectations of the economic situation development for the next three months are markedly lower than in August, for next six months they are the same. Overall, the confidence in construction decreased by 7 points, m-o-m, and it is 7 points down, y-o-y.

In trade, the assessment of current economic situation in September decreased, compared to August. According to respondents, in September, the finished goods stocks decreased as well. Expectations of the economic situation development for the period of the next three months are lower than in August, for next six months they are higher. In general, the confidence in trade decreased by 1.3 point, m-o-m, and it is 11 points up y-o-y.

In selected services, according to respondents, the assessment of current economic situation and the assessment of demand decreased slightly in September compared to August. Expectations of demand for the next three months increased. For the period of the next three months expectations of total economic situation are the same as in August, for next six month they are slightly lower. Overall, the confidence in selected services increased slightly (by 0.3 point), compared to August; while in the y-o-y comparison it is 21 points up.

Consumer confidence indicator decreased by 1 point compared to August, to be 0.2 point up, compared to September 2009. The survey taken among consumers in September indicates that consumers expect for the next twelve months hardly any changes in the overall economic situation as well as in their own financial standing. The share of respondents expecting rises in unemployment however increased markedly in September. The percentage of respondents planning to save money increased a bit.

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 September 2010
End of data processing: 23 September 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, 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: 24.09.2010
The data are valid as of the release date of the publication.