Business cycle survey (in entreprises of industry, construction, etc.) - August

Confidence in domestic economy decreased slightly in August. The composite confidence indicator (economic sentiment indicator) decreased, namely by 0.8 point, m-o-m. Confidence of entrepreneurs decreased, an increase was recorded only in industry. Confidence of consumers increased slightly, compared to July. Compared to August 2008, the composite confidence indicator was 22.8 points down.



Business confidence indicator decreased by 1.2 point in August compared to July. Among entrepreneurs, the confidence increased only in industry. In construction, the confidence decreased slightly and the biggest drop was recorded in trade and selected services. Compared to August 2008 the confidence of entrepreneurs is lower by 25.5 points.

In industry, the assessment of current overall economic situation in August did not change compared to July. Assessment of total and external demand increased slightly. According to respondents, stocks increased. For the next three months respondents’ expectations regarding production activity and employment are more favourable than in July. For the period of the next three as well as six months expectations of total economic situation are higher than in July. Overall, in August, the confidence in industry increased for the sixth time in a row (by 0.7 point), m-o-m; but it is 22 points down, y-o-y.

In construction, the assessment of current economic situation in August increased compared to July. The assessment of current total demand, however, decreased. For the period of the next three months respondents expect a slight slowdown in the development of construction activity and count on almost the same employment as in July. Respondents estimate that they have work secured by contracts for 8.5 months ahead. Expectations of the economic situation development for the period of the next three as well as six months are, however, higher than in July. Overall, the confidence in construction decreased by 1 point, m-o-m, and it is 35 points down y-o-y.

In trade, assessment of current economic situation in August decreased, compared to July. Also expectations of the economic situation development for the period of the next three as well as six months are lower than in July. According to respondents, in August, the finished goods stocks increased. Overall, the confidence in trade decreased by 3.7 points, m-o-m, and it is 21.3 points down, y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased in August compared to July. The assessment of demand decreased, too, as well as its expectations for the next three months. Expectations of the economic situation for the period of the next three as well as six months, however, increased compared to July. Overall, the confidence in selected services decreased by 3.3 points, compared to July; while in the y-o-y comparison it is 29.3 points down.

Consumer confidence indicator increased by 0.7 point, m-o-m, to fall by 11.8 points, y-o-y. The survey taken among consumers in August indicates that, compared to July, consumers expect for the next twelve months a slight increase in the overall economic situation as well as a moderate improvement in their own financial standing. The share of respondents expecting a rise in unemployment increased, compared to July. The percentage of respondents planning to save money decreased slightly.

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Note

Contact: Marie Hörmannová, phone (+420) 274052049, e-mail: marie.hormannova@csu.gov.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 August 2009
End of data processing: 24 August 2009
Related publication: 1201-09 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services

(Publications available also at /1-ep-1 )



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 seasonally non-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.