Confidence in the Czech economy fell by 0.1 point month-on-month to 95.2 in November. It has been declining for five months in a row. The decline is mainly due to a drop in consumer confidence, while entrepreneurs’ outlook for the economy has improved. This follows from the results of a survey published today by the Czech Statistical Office (CSO). Compared to last November, on the other hand, confidence grew, both overall and among individual groups of consumers and entrepreneurs.
“In summary, the published November confidence indicator indicates that the process of strong recovery of the domestic economy will be interrupted at the end of this year. purchases of goods and services, “said Miroslav Novák, an analyst at Akcenta.
Entrepreneurs’ confidence in the economy increased by 1.5 points to 96.2 in November compared to October. In contrast, it fell sharply among consumers, by 8.1 points to 90.4. “The deterioration of the epidemic situation and the rapidly rising prices of energy and other commodities have undoubtedly been reflected in a sharp deterioration in consumer sentiment. Compared to last month, people are much more concerned about rising unemployment and especially their deteriorating financial situation. to reach for savings, “said Anastasija Nejasova from the CZSO Business Tendency Department.
According to the CZSO, the share of consumers expecting a worsening of the overall economic situation in the next 12 months increased significantly, while at the same time the share of people expecting an improvement in their own financial situation decreased significantly again. “The number of respondents worried about further price increases rose again in November, and is thus the highest in the history of the survey,” the CZSO said. Consumers’ fears of rising unemployment have also increased.
Although business confidence, as opposed to consumers, has grown overall, business opinions vary across sectors. The growth of confidence in the entire business sector is driven mainly by industry and construction. In industry, business confidence in the Czech economy rose by 4.6 points month-on-month to 93.2 and in construction by 2.4 points to 114. On the other hand, confidence fell in trade and selected service sectors. Among traders, the confidence indicator decreased by 1.2 points to 104.7 and in services by 1.3 points to 96.3.
“In all sectors, however, there is great uncertainty about future developments, which is also accompanied by expectations of rising prices of products, goods and services for a record number of entrepreneurs,” said Jiří Obst, head of the CZSO’s business cycle research department.
According to the chief economist of the Czech Banking Association, Jakub Seidler, the common factor in the November survey is the expectation of higher inflation. “Households are most worried about this in the history of the time series, and at the same time entrepreneurs are increasingly expecting their sales prices to rise,” he said.
Jan Hadrava, Director of Strategic Consulting at PwC Czech Republic, believes that it is only a matter of time before data for entrepreneurs and consumers begin to converge again. “First of all, business optimism will probably decline, and with it the overall indicator,” he said.
Year-on-year, confidence rose by a total of 12.6 points in November. Consumer confidence in the economy increased by seven points and among entrepreneurs by 13.8 points.