Business cycle survey - February 2005
Confidence of both entrepreneurs and consumers continues
Publication Date: 25. 02. 2005
Product Code: r-1201-05
The composite confidence indicator balance did not change in February 2005 compared to the previous month. The business confidence indicator balance did not change either; the consumer confidence indicator balance decreased slightly. However, in the year-on-year comparison, the business confidence indicator balance was higher by 4 points, the consumer confidence indicator balance by 20 points and the composite confidence indicator balance by 7 points.
In industry (926 respondents), 42% of the respondents considered their economic situation in February good, 55% satisfactory and 3% bad, which is after seasonal adjustment the same result as in January. The assessment of current total demand (order books) for enterprise output decreased compared to the assessment in January (balance 2 points down). The assessment of current foreign demand decreased, too (balance 5 points down). Stocks of finished goods decreased, the respondents say (balance 4 points down). In next three months, the respondents expect the production activity to speed up (balance 7 points up) and the employment to decrease (balance 2 points down). In next six months , however, they expect their economic situation to get better (balance 4 points up). All the data are seasonally adjusted.
On the whole, the confidence indicator balance in industry increased by 3 points month-on-month, compared year-on-year, it is by 1 point up on February 2004.
In construction enterprises (554 respondents), the assessment of the current economic situation in February is still very favourable; however, it decreased compared to January (balance 15 points down, seasonally adjusted). The assessment of current total demand (order books) for enterprise output decreased, too, after a marked growth in last month (balance 11 points down). In next three months , the respondents expect the construction activity to slow down (balance 9 points down) with the employment decreasing, too (balance 2 points down) – all seasonally adjusted. Generally, the confidence indicator balance in construction decreased by 7 points month-on-month. However, when compared to February 2004 it is 1 point up.
Of respondents engaged in trade (315 respondents), 47% considered the economic situation of their enterprise in February good, 50% as corresponding to the season and 3% bad. Month-on-month, this translates into an increase in the balance by 3 points after seasonal adjustment. All in all, trade increased its stock of inventories (balance 5 points up, seasonally adjusted). Unchanged price development is expected by 85% of the respondents, while 10% expect prices to grow and 5% to drop. In next six months , 26% of the respondents predict improvement in the economic situation (24% in January), 69% anticipate no changes (73% in January) and 5% expect worsening (3% in January). The overall confidence indicator balance in trade has not changed in comparison to January, but was 10 points up on February 2004.
In selected branches of services (770 respondents), 63% of the respondents assessed their current economic situation in February as good, 36% as corresponding to the season and 1% as bad, which was a better assessment than in January. 30% of the respondents expect the demand to rise (order books), while 63% anticipate no changes and 7% think that the demand will decrease; this expectation is also better than in January. According to 87% of the respondents, no changes in price development should occur, 11% envisage a rise in prices and 2% a drop. The number of employees is expected to decrease (26% of the respondents), remain unchanged (61%) or to increase (13% of the respondents). The overall confidence indicator balance in selected branches of services increased by 8 points and in the y-o-y comparison it is the same as in February 2004.
Contact: Marie Hörmannová, phone (+420) 274052049,
e-mail hormannova@gw.czso.cz
Data source: CZSO business surveys, GfK Praha consumer survey
End of data collection: 21 February 2005
End of data processing: 23 February 2005
For more information see: https://csu.gov.cz
Methodological explanatory notes :
The composite confidence indicator is a weighted average of seasonally adjusted confidence indicators in industry, construction, trade, and of the consumer confidence indicator. The composite business confidence indicator is a weighted average of seasonally adjusted confidence indicators in industry, construction and trade. The confidence indicator in industry has a double weight. Since January 2002, the consumer confidence indicator has been composed of four indicators (expected financial situation of consumers, expected total economic situation, expected total unemployment (with inverted sign) and savings expected in 12 months to come). Since January 2003, the confidence indicators have been presented as basic indices; the base being the average of 1995.
The branch confidence indicators are constructed as averages of seasonally adjusted weighted business cycle balances. The business cycle balance is the percentage difference between the responses “growth (+)” and “fall (-)”. The confidence indicator for industry is the average of seasonally adjusted balances of three indicators (the assessment of total demand, stocks of final production (with inverted sign) and the expected development of production activity). The confidence indicator for construction is the average of two indicators (the assessment of total demand and the expected development of employment). The confidence indicator for trade is the average of three indicators (the assessment of economic situation, stocks (with inverted sign) and the expected development of economic situation). The business cycle survey in selected services has been conducted by the CZSO since May 2002. This is why the time series are not seasonally adjusted. Data for hotels and restaurants are included in selected services. The time series are converted and the data are comparable. The confidence indicator for selected services is the average of three indicators (the assessment of economic situation, the assessment of demand and expected demand). The confidence indicator for selected services is not being included into composite indicators, yet.
The data above were derived in a weighted manner: sales were used as weights for industry, services and trade, whereas construction work of contractors and subcontractors was the weight for construction. The responding groups of enterprises account for more than a half of sales (industry) and volume (construction) and for a quarter of sales in trade.