Business cycle survey - March 2004
Confidence of entrepreneurs and consumers remains considerably different
Publication Date: 25. 03. 2004
Product Code: r-1201-04
In March 2004 the composite confidence indicator balance increased compared to the previous month. Its value was positively influenced by both the business indicator as well as consumer confidence indicator.
In industry (944) 34% of respondents considered their economic situation in March good, 62% satisfactory and 4% bad, which is a bit worse result than in February. After seasonal adjustment, the assessment of current total demand (order books) for enterprise output worsened compared to very favourable assessment in February (balance 8 pts. down), however, in the long-term comparison it reached the second highest value since August 2001. The assessment of current foreign demand (order books) for enterprise output worsened as well (balance 6 pts. down). Finished goods stocks remained unchanged, the respondents say.
The respondents expect acceleration of production activity in next three months (balance 12 pts. up), unchanged development of employment and an improvement in their total economic situation in next six months to come (balance 9 pts. up). (All the data seasonally adjusted.)
On the whole, the confidence indicator in industry increased on the previous month. Compared y-o-y, it is 4 points up on March 2003.
In construction enterprises (463) the good assessment of the current economic situation from previous months was maintained in March (after seasonal adjustment), however, against February there was a decrease. The assessment of domestic demand (order books) for enterprise output increased (balance 3 pts. up). At distinctive improvement of the expectation of construction activity (balance 11 pts. up) most of the respondents expect unchanged development of employment in next three months (however, when seasonally adjusted the balance went 8 pts. down). The overall confidence indicator in construction slightly decreased compared to the previous month.
Of respondents engaged in trade (327) 34% considered in March the economic situation of their enterprises good, 64% corresponding to the season and 2% bad, which is a 9 points increase of the balance in comparison to February (seasonally adjusted). Respondents signal unchanged amount of stocks. Unchanged price development is expected by 85% respondents, 8% expect growth and 7% expect drop. 56% of respondents anticipate no changes in the economic situation in next six months to come (69% in February), 38% predict improvement (26% in February) and the remaining 6% expect worsening (5% in February). The overall confidence indicator in trade increased when compared to February.
In selected services (759) 61% of the respondents assessed their economic situation in March to be good, 38% of them saw the situation adequate to the season and 1% saw it bad, which is worse assessment than in February. 38% of the respondents expected a rise in demand for enterprise output (order books), and 57% or 5% of respondents anticipated an unchanged or worse situation, respectively, which is better expectation than in February. No changes in prices should occur according to 75% of respondents, 18% envisage a rise and 7% a decrease in prices. A decrease in the number of employees is expected by 36% of respondents, no changes are expected by 48% of them, and 16% of respondents expect an increase. The overall confidence indicator in selected services slightly decreased.
A survey taken in consumers (1000) in March suggests an improvement of the balance of expectation of the total economic situation and their financial situation in next twelve months . The expected total economic situation balance increased by 1 point and the balance of expected consumers’ financial situation increased by 3 points. The share of consumers expecting an increase of unemployment decreased compared to February, and the balance decreased by 9 points. The share of consumers intending to save money decreased (balance 3 pts. down). The overall consumer confidence indicator increased compared to February; however, for the period from March 2003 to March 2004 the consumer confidence indicator balance decreased by 10 points.
Methodological notes:
Contact: Marie Hörmannová, phone (+420) 274052049,
e-mail hormannova@gw.czso.cz
Source: CZSO business surveys, GfK Praha consumer survey
End of data collection: 19 March 2004
End of data processing: 23 March 2004
For more information see: https://csu.gov.cz
Methodological explanatory notes :
The composite confidence indicator is a weighted average of seasonally adjusted confidence indicators in industry, construction, trade, and of the consumer confidence indicator. The composite business confidence indicator is a weighted average of seasonally adjusted confidence indicators in industry, construction and trade. The confidence indicator in industry has a double weight. Since January 2002, the consumer confidence indicator has been composed of four indicators (expected financial situation of consumers, expected total economic situation, expected total unemployment (with inverted sign) and savings expected in 12 months to come). Since January 2003, the confidence indicators have been presented as basic indices; the base being the average of 1995.
The branch confidence indicators are constructed as averages of seasonally adjusted weighted business cycle balances. The business cycle balance is the percentage difference between the responses “growth (+)” and “fall (-)”. The confidence indicator for industry is the average of seasonally adjusted balances of three indicators (the assessment of total demand, stocks of final production (with inverted sign) and the expected development of production activity). The confidence indicator for construction is the average of two indicators (the assessment of total demand and the expected development of employment). The confidence indicator for trade is the average of three indicators (the assessment of economic situation, stocks (with inverted sign) and the expected development of economic situation). The business cycle survey in selected services has been conducted by the Czech Statistical Office since May 2002. This is why the time series are not seasonally adjusted. Data for hotels and restaurants are included in the data for selected services. The time series are converted and the data are comparable. The confidence indicator for selected services is the average of three indicators (the assessment of economic situation, the assessment of demand and expected demand). The confidence indicator for selected services is not being included into composite indicators, yet.
The data above were derived in a weighted manner: sales were used as weights for industry, services and trade, whereas construction work of contractors and subcontractors was the weight for construction. The responding groups of enterprises account for more than a half of sales (industry) and volume (construction) and for a quarter of sales in trade.