Business cycle survey - August 2010

Confidence of entrepreneurs increased slightly, confidence of consumers decreased

Confidence in domestic economy decreased slightly m-o-m in August. The composite confidence indicator (economic sentiment indicator) decreased by 0.8 point. Confidence of entrepreneurs increased slightly (by 0.1 point). Confidence of consumers decreased by 4.5 points, m-o-m. Compared to a low value in August 2009, the composite confidence indicator is 16.3 points up.

Business confidence indicator increased slightly (by 0.1 point) in August compared to July. Among entrepreneurs, confidence increased in industry and in trade; in construction and in selected services it decreased. Compared to low values in the last year, the confidence of entrepreneurs is 18.7 points up.

In industry, the assessment of current overall economic situation in August increased slightly compared to July as well as the assessment of total demand. According to respondents, stocks increased. For next three months, respondents expect increase in production activity by steady employment. Expectations of general economic situation for the next three as well as six months are almost the same as in July. Overall, in August, the confidence in industry increased by 0.3 point, m-o-m; compared to low values in last year it is 22.3 points up.

In construction, the assessment of current economic situation decreased in August compared to July. Assessment of total demand decreased slightly. For the period of the next three months respondents expect a slowdown of construction activity and a slight decrease in employment, compared to July. Respondents estimate that they have work secured by contracts for 8.7 months ahead. Expectations of the economic situation development for the next three months are higher than in July, for next six months they are lower. Overall, the confidence in construction decreased by 1 point, m-o-m, and it is 1.5 point down, y-o-y.

In trade, the assessment of current economic situation in August increased, compared to July. According to respondents, in August, 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 July. In general, the confidence in trade increased by 6 points, m-o-m, and it is 7.6 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 August compared to July. Expectations of demand for the next three months increased. For the period of the next three months expectations of total economic situation are higher than in July, for next six month they are slightly lower. Overall, the confidence in selected services decreased by 1 point, compared to July; while in the y-o-y comparison it is 19 points up.

Consumer confidence indicator decreased by 4.5 points compared to July, to be 6.5 points up, compared to low value in August 2009. The survey taken among consumers in August indicates that consumers expect for the next twelve months a decrease in the overall economic situation as well as in their own financial standing. The share of respondents expecting rises in unemployment increased in August. The percentage of respondents planning to save money decreased.

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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: 18 August 2010
End of data processing: 20 August 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: 24.08.2010
The data are valid as of the release date of the publication.