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

In February 2009, the balance of composite confidence indicator (economic sentiment indicator) decreased by 3.3 points, m-o-m, (it was 3.2 points down in January and 8.6 points down in December, m-o-m). Business confidence indicator balance fell by 3.7 points (it was 2.8 points down in January and 8.9 points down in December) and the balance of consumer confidence indicator dropped by 1.7 points (it was 4.8 points down in January and 7.5 points down in December). Compared to February 2008, the composite confidence indicator balance decreased by 35.1 points, the confidence of entrepreneurs is 37.4 points down and the confidence of consumers is down by 25.7 points.

In industry, the assessment of current overall economic situation decreased in February compared to January. The assessment of both total and external demand decreased, too. According to respondents, stocks did not change. For the next three months respondents expect a slowdown of production activity and decrease in employment. For the next three as well as six months expectations of total economic situation are lower than in January. Overall, the confidence indicator balance in industry decreased by 3 points (it was 1.6 down, m-o-m, in January and 13 points down, m-o-m, in December) and it is 46.6 points down, y-o-y. In February, the indicator showed its lowest value from the beginning of data collection in 1993.

In construction, the assessment of current economic situation in February decreased, m-o-m, as well as the assessment of current total demand. For the period of the next three months respondents expect a slowdown in the development of construction activity and decrease in employment, even though their estimate in terms of work secured by contracts is slightly better (for 8.4 months ahead). Expectations of the economic situation development for the period of the next three as well as six months are lower than in January. Overall, the confidence indicator balance in construction decreased by 8.5 points, m-o-m; it is 21 points down, y-o-y.

In trade, assessment of current economic situation in February slightly decreased, m-o-m. Expectations of the economic situation development for the period of the next three months are a little higher than in January, for the next six months they are lower. According to respondents, in February, the finished goods stocks decreased. Overall, the confidence indicator balance increased slightly (by 0.7 point), m-o-m, but it is 20.7 points down, y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased, m-o-m, as well as the assessment of demand. Its expectations for the next three months, however, increased. Expectations of economic situation for the period of the next three as well as six months decreased compared to January. Overall, the confidence indicator balance in selected services decreased by 4.7 points, m-o-m, and is 30.7 points down, y-o-y.

The survey taken among consumers in February indicates that, compared to January, consumers expect for the next twelve months a slight worsening of the overall economic situation and worsening of their own financial standing. Also in February, the share of respondents expecting a rise in unemployment increased slightly. The percentage of respondents planning to save money decreased a little. The consumer confidence indicator dropped by 1.7 points, m-o-m; it is by 25.7 points down, y-o-y.

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: 19 February 2009
End of data processing: 23 February 2009
Related publication: 1201-08 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.