Confidence in the Czech economy fell by 0.9 points to 95.3 points in October, declining for the fourth month in a row. Entrepreneurs and consumers alike are more pessimistic. The confidence of companies in the economy is affected by the unfavorable situation in the automotive industry and the lack of materials, especially by consumers about fears of rising prices. This resulted from information published on the website by the Czech Statistical Office (CSO). Compared to last October, these indicators are higher.
“In summary, the October confidence indicator published indicates that the process of strong recovery of the domestic economy will be interrupted at the end of this year. willingness of households to make purchases of goods and services, “said Miroslav Novák, an analyst at Akcenta.
In October, business confidence in the economy fell by 0.6 points month-on-month to 94.7 points and in consumers by 2.2 points to 98.5 points. According to Jiří Obst, the CZSO’s view of the Czech economy, according to the head of the CZSO’s business cycle survey, the lack of materials has a negative effect, in addition to the situation in the automotive industry and related industries. Companies perceive it as a major barrier, which often leads to a slowdown or cessation of production, and this is reflected, among other things, in significantly lower utilization of production capacity, added Obst. Consumers most of all perceive the current significant increase in the price level, with up to half of them expecting further growth in the coming months, said Anastasija Nejasova from the Business Cycle Surveys Department.
Confidence among industrial entrepreneurs decreased month-on-month for the fourth time, falling by 3.9 points to 88.6 since September. Companies rated their current demand worse than in September, and there was a significant drop in those who expect a higher production rate for the next three months. “As in the previous quarter, the main barrier to production growth is the lack of material, which was reported by approximately 32 percent of respondents. The second most important barrier is insufficient demand, which limits almost 24 percent of respondents,” the statistics said.
According to ČSOB analyst Petr Dufek, the deterioration of the mood in the economy is no surprise. “The Czech economy is entering a weaker condition in the last quarter of this year due to the persistent shortage of imported components and the rapid rise in raw material and energy prices. down, “he said.
Confidence in the Czech economy among companies doing business in the construction industry stagnated at 111.6 points in September. The share of builders who assess the demand for work as insufficient has hardly changed, and construction companies do not even expect a significant change in the number of employees in the next three months. At the same time, the lack of employees is the main barrier to the growth of production for 38 percent of companies, about 17 percent stated a lack of materials or equipment.
Firms from the trade and services sector were more optimistic about the development of the economy in October compared to September. Merchant confidence increased by 2.3 points to 105.9 points and confidence in selected services, including the banking sector, increased by 2.3 points to 97.6.
The business-to-consumer survey took place from 1 to 18 October.