Economic Confidence Grows To 99 Points In August

Prague, Aug 24 (CTK) – Confidence in Czech economy grew by 0.4 point to 99.1 points in August after July’s drop, business confidence rose but consumer confidence fell, the Czech Statistical Office (CSU) said today.

 

In annual terms, the composite confidence indicator is higher.

 

Business confidence increased by 0.8 point to 96.9 points in August against July. It went up in all the monitored sectors except for trade.

 

“In particular construction was doing well in this month. Confidence in its positive development continues to grow significantly,” Jiri Obst, head of the business cycle surveys unit at CSU, has said.

 

“On the contrary, the high consumer optimism from the past months is slowly getting lower. Price growth is the main concern,” he added.

 

Analysts are not surprised by the confidence in construction, they say that demand for construction work is really high.

 

“Companies have to extend their capacity, which is insufficient, and lack of flats is seen on the market [in particular in big towns]. The price growth in construction thus accelerated notably in the past months, it corresponds with the overhang of demand,” said Komercni banka analyst Viktor Zeisel.

 

Consumer confidence fell by 1.5 point to 110.3 points.

 

Besides price rise, consumers are more afraid of deterioration of the overall economic situation. Worries about rise in unemployment slightly decreased, The share of people intending to save money fell.

 

Analysts are also of the opinion that the slower economic growth should not affect unemployment.

 

“We expect a significant slowdown of the economy this year. The domestic economy expanded by 4.5 percent last year but this year it will grow by only 3 percent. Nevertheless, unemployment will stay at its record-low levels,” Zeisel added.

 

The composite confidence indicator has been growing and falling repeatedly this year in a month-on-month comparison. In annual terms, it has increased each month.

 

Last year in August, the confidence was at 98.7 points. Consumer confidence rose against August 2017 and business confidence grew moderately as well.

 

Confidence indicators – basic indices (2005 average = 100):

 

Indicator

August 2017

July 2018

August 2018

business – total

96.8

96.1

96.9

industry

96.8

94.3

95.2

construction

83.8

97.6

100.7

trade

102.7

98.1

96.7

selected services

97.4

97.4

98.1

consumers

107.9

111.8

110.3

composite indicator

98.7

98.7

99.1

 

Source: CSU