Confidence in the Czech economy fell by 1.1 points month-on-month to 98.6 points in August. It fell for the second time in a row, but in July it was 4.3 points. Confidence among entrepreneurs deteriorated in August, affecting developments in industry and tourism. On the contrary, consumer confidence has increased. This follows from data published today by the Czech Statistical Office (CSO). Compared to last August, all indicators are at a higher level.
Confidence in the economy among entrepreneurs fell by 2.2 points to 97.1 points in August. “In contrast to the previous month, the August confidence of entrepreneurs was significantly affected not only by the continuing decline in sentiment in the industry but also by a decline in confidence in services, especially in sectors directly or indirectly linked to tourism and partly industry,” said Jiří Obst, CZSO’s head of business cycle surveys.
Overall, according to ČSOB analyst Petr Dufek, the results do not show a return of general pessimism. According to him, it is more a matter of taming the previous optimism, which was associated with high expectations after the relaxation of anti-pandemic measures. “The slight decline in optimism corresponds to supply problems in industry and trade and unfulfilled expectations in services. The survey also shows that companies expect further price increases, which consumers fear again. In any case, the mood in the economy remains positive and should therefore, it will also have a positive effect on the results of the economy for the third quarter, “said Dufek.
Komerční banka economist Michal Brožka also believes that despite the decline in August, overall confidence in the economy is at pre-pandemic levels showing the expansion of the economy. “The risk for development in the coming months is the delta variant and, in the case of industry and construction, the availability of production inputs,” he said.
Confidence among industrial enterprises decreased by 1.6 points to 97.1 points. For the second time in a row, the share of entrepreneurs who expect the growth rate of production activity to fall in the next three months has fallen. It is thus at its five-month low. Business confidence in trade fell by 2.3 points to 102.4 points, and in services by 3.4 points to 94.2 points.
In the case of builders, on the other hand, confidence in the economy increased by 2.4 points to 116.4 points. “For the fifth time in a row, the share of entrepreneurs expecting an increase in construction work prices increased. The resulting balance of this indicator thus reached its highest value since October 2008,” said Anastasija Nejasova from the Business Cycle Surveys Department.
For consumers, confidence increased by 4.1 points month-on-month to 106 points. The share of people who expect the overall economic situation to deteriorate in the next 12 months was lower. On the contrary, there are more people waiting for their own financial situation to improve. Concerns about rising unemployment fell slightly after the July rise. “The number of respondents worried about rising prices remained significantly high in August,” the statisticians added.
The survey among entrepreneurs took place from 1 to 17 August, among consumers from 1 to 15 August.