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Slovakia: Economic Sentiment Indicator Increased to 90.4

Published: March 30, 2013; 14:48 · (Vindobona)

The three-month moving average of economic sentiment indicator (ESI) increased by 1,8 points to 90,4 compared with the previous month´s value.

Slovakia: Economic Sentiment Indicator Increased to 90.4 / Picture: ©

The development of ESI was affected mostly by a more significant increase of confidence indicators in industry and by a slighter increase in construction and at customers. ESI is constantly lower than in the corresponding period last year (by 8,4 points) and it is below the long-term average by 14,9 points.

Confidence indicator in industry increased by 12,3 percentage points in March to the value 0 representing the highest value since June 2012. The indicator development was affected mostly by an expected increase of industrial production in the next three months. Compared to the improved value in February, the confidence indicator in construction increased by 1,5 points to minus 52 as a result of more optimistic evaluations of both of its items (the current demand and expected employment). In March 2013, the indicator was by 26 points below the long-term average. Confidence indicator in trade decreased by 3,3 percentage points in March compared with February and it was affected by more pessimistic evaluations of the business situation over the past three months and by a higher stock of goods. The confidence indicator in services decreased in March by 6,7 percentage points to the level 8,3. The indicator development was affected by a negative evaluation of the current but mainly expected demand, while the respondents assessed positively the business situation.

The consumer atmosphere in Slovakia continues to improve. The consumer confidence indicator is increasing for the third month in a row. In March, it increased by 3,3 points to minus 29,6 compared with the previous month but even if it lags behind the long-term average it suggests a more favourable situation than a year ago (by 2,7 points).

In February the Economic Sentiment Indicator (ESI) continued its recovery that has started in October of last year. The marked improvement by 1,6 points in the euro area (to 91,1) and 1,2 points in the EU (to 92,0) was driven by increases in industry and services. Consumer confidence also improved marginally. Retail trade and construction, on the other hand, booked moderate decreases.

Continuing the broad upward trend observed since November, industry confidence improved in the euro area (+2,6) and the EU (+2,2), fuelled by a much more positive assessment of production expectations and the current level of overall order books. The assessment of stocks of finished products improved less significantly (EU) or remained unchanged (euro area). Also services confidence continued the upward trend it has been following since October. The increases, marked in the euro area (+2,3) and more moderate in the EU (+0,9), were the result of sharp improvements in managers' assessment of the past business situation, and to a lesser extent - their views on past demand. Managers' demand expectations improved in the euro area, while deteriorating in the EU. Confidence in retail trade decreased somewhat in the EU (-0,8) and the euro area (-0,5), driven by a worsened assessment of the present business situation and the current volume of stocks (EU) and business expectations (euro area). Confidence in construction decreased slightly in the EU (-0,4) and, more markedly, in the euro area (-1,3). While the assessment of order books worsened in both areas, employment expectations deteriorated in the euro area but became somewhat less pessimistic in the EU.

Consumer confidence increased marginally in the euro area and the EU (+0,3). Consumers were more positive about the future general economic situation, while more negative about their savings expectations.