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

In June 2009, the balance of composite confidence indicator (economic sentiment indicator) dropped after three months of moderate increase, namely by 0.9 point, m-o-m. Business confidence indicator balance decreased by 0.9 point, too; the balance of consumer confidence indicator fell by 1 point. Compared to June 2008, the composite confidence indicator balance decreased by 24.7 points, the confidence of entrepreneurs is 28.8 points down and the confidence of consumers is down by 8 points.

In industry, the assessment of current overall economic situation in June hardly changed compared to May. Already poor assessment of total demand did not change either; assessment of external demand decreased slightly. According to respondents, stocks decreased. For the next three months respondents expect recovery in production activity and in employment. For the period of the next three as well as six months expectations of total economic situation are lower than in May. Overall, in June, the confidence indicator balance in industry increased by 2.7 points, m-o-m, which is, however, 29.3 points down, y-o-y.

In construction, the assessment of current economic situation in June decreased compared to May. The assessment of current total demand hardly changed. For the period of the next three months respondents expect a slight increase in the development of construction activity and no changes in employment. 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 lower than in May. Overall, the confidence indicator balance in construction decreased a little (by 0.5 point), m-o-m; it is 34.5 points down, y-o-y.

In trade, assessment of current economic situation in June decreased, compared to May. Expectations of the economic situation development for the period of the next three months are lower than in May, for next six months they are higher. According to respondents, in June, the finished goods stocks increased. Overall, the confidence indicator balance decreased by 5.3 points, m-o-m, and it is 18.6 points down, compared to June 2008.

In selected services, according to respondents, the assessment of current economic situation decreased in June compared to May. Also the assessment of demand decreased slightly and its expectations for the next three months decreased too. Expectations of economic situation for the period of the next three as well as six months decreased compared to May. Overall, the confidence indicator balance in selected services dropped by 5 points, compared to May; it is 29 points down, y-o-y.

The survey taken among consumers in June indicates that, compared to May, consumers expect for the next twelve months a moderate decrease in the overall economic situation and a slight improvement in their own financial standing. The share of respondents expecting a rise in unemployment fell slightly, compared to May, but remains high. The percentage of respondents planning to save money dropped. The consumer confidence indicator decreased by 1 point, m-o-m, to fall by 8 points, 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 June 2009
End of data processing: 23 June 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.