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

In March 2009, the balance of composite confidence indicator (economic sentiment indicator) increased for the first time since February 2008 by 1.7 point, m-o-m. Business confidence indicator balance increased by 1.2 point and the balance of consumer confidence indicator increased by 3.7 points. However, compared to March 2008, the composite confidence indicator balance decreased by 33 points, the confidence of entrepreneurs is 35.6 points down and the confidence of consumers is down by 22.5 points.

In industry, the assessment of current overall economic situation in March further decreased compared to February. The assessment of both total and external demand decreased, too. According to respondents, stocks increased. For the next three months respondents, however, expect recovery in production activity and employment. For the next three as well as six months expectations of total economic situation are higher than in February, too. Overall, in March the confidence indicator balance in industry increased by 2.6 points; m-o-m, which is, however, 43.4 points down, y-o-y, reaching the second lowest value in its history (since 1993).

In construction, the assessment of current economic situation in March increased slightly, m-o-m. The assessment of current total demand, however, decreased. For the period of the next three months respondents expect a slowdown 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 higher than in February. Overall, the confidence indicator balance in construction decreased by 2 points, m-o-m; it is 25.5 points down, y-o-y.

In trade, assessment of current economic situation in March decreased, m-o-m. Expectations of the economic situation development for the period of the next three as well as six months are, however, higher than in February. According to respondents, in March, the finished goods stocks decreased. Overall, the confidence indicator balance increased by 2 points, m-o-m, but it is 17.7 points down, y-o-y.

In selected services, according to respondents, the assessment of current economic situation decreased, m-o-m, in March. The assessment of demand increased slightly, its expectations for the next three months decreased a little. Expectations of economic situation for the period of the next three as well as six months decreased compared to February. Overall, the confidence indicator balance in selected services decreased slightly (by 0.3 points), m-o-m, and is 30 points down, y-o-y.

The survey taken among consumers in March indicates that, compared to February, consumers expect for the next twelve months an improvement of the overall economic situation and no changes in their own financial standing. The share of respondents expecting a rise in unemployment decreased m-o-m, but still remains high. The percentage of respondents planning to save money decreased a little. The consumer confidence indicator increased by 3.7 points, m-o-m; to fall by 22.5 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 March 2009
End of data processing: 23 March 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.