Business cycle survey - March 2010

Slight m-o-m decrease in confidence

Confidence in domestic economy decreased slightly m-o-m in March. The composite confidence indicator (economic sentiment indicator) decreased by 0.6 point, m-o-m. Among entrepreneurs, confidence decreased in industry; in construction, trade, and in selected services it increased. Confidence of consumers decreased by 1.2 point, m-o-m. Compared to a low value in March 2009, the composite confidence indicator is 14.8 points up.

Business confidence indicator decreased by 0.4 points in March compared to February. Among entrepreneurs, confidence decreased in industry; in construction, trade, and in selected services it increased. Compared to low values in the last year, the confidence of entrepreneurs is 15.4 points up.

In industry, the assessment of current overall economic situation in March improved compared to February. Assessment of total and external demand increased as well. According to respondents, stocks increased. Respondents’ expectations regarding production activity and general economic situation for the next three months are lower than in February, for the period of the next six months they are higher. Overall, in March, the confidence in industry decreased after higher growth in February by 2.3 points, m-o-m; compared to very low values in last year it is however 25.4 points up.

In construction, the assessment of current economic situation in March did not change compared to February. Assessment of total demand improved slightly. For the period of the next three months respondents expect an improvement of employment compared to February, expectations of construction activity are cautious. Respondents estimate that they have work secured by contracts for 9 months ahead. Expectations of the economic situation development for the period of the next three months are lower than in February, for next six moths they are higher. Overall, the confidence in construction increased by 3.5 points, m-o-m, and it is 10 points down, y-o-y.

In trade, assessment of current economic situation in March increased slightly, compared to February. According to respondents, in March, the finished goods stocks decreased. Expectations of the economic situation development for the period of the next three months are the same as in February, for next six months they are lower. In general, the confidence in trade increased by 1 point, m-o-m, and it is 4.7 points down compared to March 2009.

In selected services, according to respondents, the assessment of current economic situation decreased slightly in March compared to February. The assessment of demand increased as well as its expectations for the next three months. For the period of the next three as well as six months expectations of total economic situation are lower than in February. Overall, the confidence in selected services increased by 1.3 point, compared to February; while in the y-o-y comparison it is 9.6 points up.

Consumer confidence indicator decreased by 1.2 point compared to February, to be 12.8 points up, compared to low value in March 2009. The survey taken among consumers in March indicates that, compared to February, consumers expect for the next twelve months a slight decrease in the overall economic situation and a slight improvement in their own financial standing. The share of respondents expecting rises in unemployment increased slightly, compared to February. The percentage of respondents planning to save money decreased.

Note
Contact: Marie Hörma nnová, 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 March 2010
End of data processing: 22 March 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 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: 24.03.2010
The data are valid as of the release date of the publication.