Czech Consumer Confidence Plummets

Confidence in the Czech economy dropped to its lowest level in five years, according to data released by the Czech Statistical Office.


Confidence in the Czech economy fell by one point to 94.6 points in September compared to August, the lowest in about five years. In the case of entrepreneurs, confidence decreased by 0.7 points to 92.9 points, while consumer confidence is down 1.8 points to 103.3 points.


Compared to last September, consumer and business confidence is lower.


Among entrepreneurs, confidence in the economy decreased by 0.9 points in trade and 1.6 points in services. On the contrary, it did not change in the industry for the fourth time in a row, the same remained in construction.


“The results of the business cycle surveys did not bring any surprising findings in September. Confidence of entrepreneurs across the monitored sectors is stable, companies appreciate especially their current situation,” said the head of the CZSO business cycle survey Jiří Obst. Results are influenced by a high degree of uncertainty of respondents in the long term. “It is therefore difficult to estimate how the business mood will continue to develop in the coming months,” he added.


“The overall report from the survey this September and generally for the whole of the third quarter can be summarized as slowing the growth of the Czech economy, but this is nothing dramatic and even surprising,” said Radomír Jáč, chief economist of Generali Investments CEE.


Confidence in industrial enterprises has been 90.3 points for four months. Industrialists thus remain the most pessimistic of economic development over the past six years. The assessment of external demand decreased compared to August. Entrepreneurs in the industry expect a steady growth rate of production over the next three months. Employment expectations are also the same.


In construction, the confidence of entrepreneurs stagnates at 101.8 points. The assessment of construction work demand decreased m/o/m. On the contrary, the evaluation of the current overall economic situation is higher. In the next three months, builders as well as industrialists almost unchanged growth rate of construction activity.


Trade confidence is 95.1 points. Stocks of goods in warehouses increased. Expectations of the global economic situation development for the next three and six months are approximately the same.


In services, where confidence is 94.2, the assessment of current total demand decreased. Expectations for the next three months are also almost unchanged.


Consumers are more concerned about the worsening of their economic situation in the next 12 months. “Concerns about consumers’ deterioration in their own financial situation have hardly changed. Concerns about rising unemployment have remained almost the same as in August,” the statisticians said. The fears of price increases slightly decreased.