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

Confidence in domestic economy increased again in December. The composite confidence indicator (economic sentiment indicator) improved by 2.1 points, m-o-m, due to increasing confidence of both consumers and entrepreneurs. Among entrepreneurs, confidence increased in industry, construction and selected services, m-o-m. Compared to a low value in December 2008, the composite confidence indicator is 6 points up.


Business confidence indicator increased by 2.3 points in December compared to November. Among entrepreneurs, confidence increased in industry, construction, and in selected services and, by contrast, dropped in trade, m-o-m. Compared to December 2008, the confidence of entrepreneurs is 3.9 points up.

In industry, the assessment of current overall economic situation in December improved compared to November. Assessment of total and external demand improved, too. According to respondents, stocks decreased. For the next three months respondents’ expectations regarding production activity and employment increased slightly. Expectations of general economic situation for the period of the next three as well as six months are higher than in November. Overall, in December, the confidence in industry increased by 4 points, m-o-m; compared to low values in last year it is 17 points up.

In construction, the assessment of current economic situation in December increased compared to November. Assessment of current total demand has not changed. For the period of the next three months respondents expect a slight improvement in the development of construction activity and employment, compared to November. Respondents estimate that they have work secured by contracts for 8.6 months ahead. Expectations of the economic situation development for the period of the next three moths are higher than in November, for next six months they are the same. Overall, the confidence in construction increased by 2.5 point, m-o-m, and it is 24.5 points down, y-o-y.

In trade, assessment of current economic situation in December decreased, compared to November. According to respondents, in December, the finished goods stocks did not change. Expectations of the economic situation development for the period of the next three as well as six months are lower than in November. After the improvement in November the confidence in trade returned to its October’s level (in December the confidence was 3.7% down, m-o-m) and it is 13 points down, y-o-y.

In selected services, according to respondents, the assessment of current economic situation increased in December compared to November. The assessment of demand decreased; its expectations for the next three months increased slightly. For the period of the next three as well as six months expectations of total economic situation are higher than in November. Overall, the confidence in selected services increased by 1 point, compared to November; while in the y-o-y comparison it is 6 points down.

Consumer confidence indicator increased by 1.2 point, m-o-m, to be 14.2 points up, compared to low values in 2008. The survey taken among consumers in December indicates that, compared to November, consumers expect for the next twelve months a slight increase in the overall economic situation and a decrease in their own financial standing. The share of respondents expecting rises in unemployment decreased, compared to November. The percentage of respondents planning to save money increased.

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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: 18 December 2009
End of data processing: 22 December 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.