Economic Barometer: Consumers Slightly More Sceptical About the Czech Economy

Sentiment in the Czech economy weakened slightly in August. The composite confidence indicator of the Czech Statistical Office (ČSÚ) fell by 0.6 points compared with July to 100.5 points. Assessments by businesses and consumers developed differently.

Business confidence remained unchanged at 100.2 points. Sentiment improved slightly only in industry, rising by 0.3 points. By contrast, the indicator fell by 1.1 points in trade and by 0.6 points in construction. Confidence also declined marginally by 0.2 points in selected service sectors.

“Business confidence remained at the level of its long-term average in August, mainly thanks to the expected increase in industrial production and, to a lesser extent, the anticipated rise in demand in selected service sectors,” explains Jiří Obst, Head of the Business Cycle Surveys Department at the ČSÚ.

Consumers More Sceptical About the Future

Sentiment among consumers deteriorated considerably more strongly. The corresponding indicator fell by 3.3 points compared with July to 102.3 points.

For the second consecutive month, the proportion of consumers expecting the overall economic situation in the Czech Republic to worsen over the next twelve months increased. At the same time, slightly more respondents assessed their current financial situation as worse than it had been a year ago.

The proportion of households expecting their financial situation to improve over the next twelve months remained unchanged from the previous month. At the same time, the number of respondents who do not plan to make any major purchases during this period increased.

“The decline in consumer confidence in August, as in the previous month, was primarily driven by growing concerns about a deterioration in the overall economic situation in the Czech Republic. This was compounded by greater uncertainty among households regarding their own financial situation and concerns about further price increases,” explains Anastasija Neradová from the ČSÚ’s Business Cycle Surveys Department.