Business cycle survey - September 2006
Despite a decrease confidence still high
Publication Date: 27. 09. 2006
Product Code: r-1201-06
The balance of composite confidence indicator (indicator of economic sentiment) decreased by 1.3 points in September 2006 compared to the previous month, the balance of business indicator decreased by 0.6 points; both balances, however, reached the second highest values in their history. The balance of consumer confidence indicator decreased by 4.5 points. Compared to September 2005, the composite confidence indicator balance increased by 5 points, the business confidence indicator balance by 5.5 points and the consumer confidence indicator balance increased by 2.4 points.
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In industry , the confidence indicator balance decreased by 2 points month-on-month but increased by 5.3 points year-on-year. In construction , the confidence indicator balance was up by 2.5 points
m-o-m and by 4 points y-o-y. In trade , the confidence indicator balance improved by 0.3 points both m-o-m and y-o-y. In selected services , the confidence indicator balance was up by 0.7 points m-o-m and by 7 points y-o-y.
In industry , favourable assessment of the current economic situation decreased slightly in September . The assessment of total demand did not change compared to the previous month; the assessment of foreign demand decreased in September. Stocks of finished goods increased, respondents say. For next three months, respondents expect a slowdown of production activity at almost stable development of employment. Stable prices are expected by 71.4% of respondents, 20.6% expect a rise and 8.0% a drop. Like in August, the respondents expect favourable development of their economic situation in next three months and its improvement in next six months.
In construction , favourable assessment of the current economic situation continued in September. The assessment of overall demand did not change against August. In comparison with August, assessment of current construction activity kept on a very good level. For next three months , the respondents expect an increase in employment and favourable development of construction activity. Anticipation of no price changes predominates among respondents, according to 85.1% of them. The respondents say they have work secured for 9.8 months ahead, the same as in August. Expectations of economic situation development for next three months are favourable, for next six months lower.
Among respondents engaged in trade , assessment of the current economic situation improved m-o-m in September. Expectations of economic situation development for next three months are the same as in August, for next six months are slightly lower. According to respondents, stock of inventories decreased in September. A stable development of the number of employees is expected by 66.6% of respondents, 14.6% expect a rise and 18.8% a drop. A rise in prices is expected by only 4.7% of respondents, 86.5% expect no changes and 8.8% a decrease.
In selected services , respondents assess their current economic situation favourably in September; assessment of demand decreased slightly. Expectations of demand development for next three months increased slightly. For next three months , a rise in employment is expected by 14.3% of respondents, 62.4% expect no changes and 23.3% a drop. Expectations of economic situation are better for next three as well as six months .
The survey taken among consumers in September indicates that consumers expect deterioration of the overall economic situation (balance down by 4.2 points) and a slight increase in their own financial situation (balance up by 0.6 points). Compared to August 2006, the percentage of consumers expecting higher unemployment increased (balance up by 7 points). Percentage of the respondents who intend to save money decreased by 7.3 points. The consumer confidence indicator decreased by 4.5 points in comparison to August.
Porovnání vybraných ukazatelů za jednotlivá odvětví v září 2006
Comparison of selected indicators in individual branches in September 2006
Note
Contact: Marie Hörmannová, phone (+420) 274052049,
e-mail marie.hormannova@csu.gov.cz
Data source: CZSO business survey, GfK Praha consumer survey
End of data collection: 21 September 2006
End of data processing: 25 September 2006
Related publication: 1201-06 Business Cycle Survey in Enterprises of Industry, Construction,
Trade and Selected Services
Methodological explanatory notes :
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 consumer confidence indicator. 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 indicators 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 basic indices are then re-based to the average of 2005; the data are comparable.