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Czech Republic: Overall Confidence Grows

Published: October 24, 2013; 14:58 · (Vindobona)

According to the Czech statistial office, the increase in confidence in the Czech economy continues.

Czech Republic: Overall Confidence Grows / Picture: © Flickr

Overall confidence in domestic economy increased in October, but less than in the previous month. The composite confidence indicator (economic sentiment indicator) increased by 1.7 points compared to September. Overall, confidence of entrepreneurs increased m-o-m. Among entrepreneurs confidence increased in industry and in selected services; in construction almost unchanged; confidence in trade decreased. Confidence of consumers increased too m-o-m. Composite confidence indicator, entrepreneurs confidence indicator and consumer confidence indicator are higher, compared to October 2012.

In industry, in October, the assessment of current overall economic situation decreased. The assessment of current total demand increased, the assessment of foreign demand almost unchanged. According to respondents, stocks of finished goods increased. Production capacity utilization in manufacturing industry increased in October and reached 83.3 %; respondents estimate they have work secured equally as in the previous quarter. Most important barrier of production still is insufficient demand; it was stated by more than half of respondents. For the next three months, respondents expect an increase in the development of production activity and a slightly increase in the employment. Expectations of general economic situation development for the next three as well as six months are higher than in September. All in all, confidence in industry increased, compared to September, and it is higher y-o-y.

In construction, in October, the assessment of current economic situation of the respondents did not change m-o-m. For the next three months, respondents expect an increase in the development of construction activity and in the employment too. The assessment of total demand in October decreased, compared to September. That is why expectations of the economic situation development for the next three months decreased, for the next six months did not change. Overall, confidence in construction almost unchanged, compared to September, and it is lower y-o-y.

In trade, in October, the assessment of current economic situation of the respondents decreased m-o-m. The stocks did not change. Expectations of the economic situation development for the next three months did not change, for the next six months increased, compared to September. In October, confidence in trade decreased m-o-m, and it is lower y-o-y.

In selected services (incl. banking sector), in October, the assessment of current economic situation of the respondents did not change, m-o-m. The assessment of demand in October did not change too, its expectations for the next three months increased. For the next three as well as six months, expectations of total economic situation development did not change, compared to September. All in all, confidence in selected services increased m-o-m, and it is higher y-o-y.

Consumer confidence indicator increased in October, m-o-m, and it is still higher y-o-y. The survey taken among consumers in October indicates that consumers are for the next twelve months less afraid of a decrease in the overall economic situation. Worries about increase in the unemployment increased, compared to September. Worries about their own financial standing decreased slightly, m-o-m. The share of respondents intending to save money did not change compared to September, the intention to acquire consumer durables increased slightly m-o-m.