Confidence in the Czech economy fell in May among entrepreneurs and consumers

Confidence in the Czech economy fell in May among entrepreneurs and consumers

Confidence in the Czech economy fell in May among entrepreneurs and consumers

Czech banknotes, money, crown – illustration photo.

Prague – Confidence in the Czech economy fell in May after two months of growth. It was up 3.1 points month-on-month to 94.1 points. It decreased in the case of entrepreneurs and consumers. This follows from the data published today by the Czech Statistical Office (ČSÚ). Year-on-year overall confidence is also lower, last May it was 102 points.

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“The worsening economic sentiment among entrepreneurs was influenced by a significant drop in confidence in the industrial sector in May, where a large proportion of respondents, especially in the automotive sector, expect a decline in the growth rate of manufacturing activity in the coming months,” said Jiří Obst, head of the CZSO's economic research department.

Business confidence decreased by 2.8 points to 95.2 points in May. Among entrepreneurs in industry, it fell by 8.2 points, in trade by 3.2 points. Confidence has not changed in the construction industry. In selected services, it increased for the second time in a row, this time by 2.3 points. In a year-on-year comparison, however, confidence was lower in all sectors this year. The most significant difference compared to last year was in the construction industry, namely 16.2 points.

Although consumer confidence rose above 90 points for the first time in more than a year in April, it returned below this threshold in May. It fell by 4.4 points to 88.5 points. “The May results can to some extent be interpreted as a certain correction of the significant growth in consumer confidence in the previous month. This is mainly due to a significant increase in household concerns about the deterioration of the overall economic situation in the Czech Republic, but also about their own financial situation in the next twelve months,” Anastasija Nejasova from the Department of Economic Surveys of the CZSO stated. He considers it positive that the assessment of the current financial situation of households has improved month-on-month.

“The relatively significant fluctuation of mood between individual months is a reminder of the fact that since the beginning of the pandemic, neither businesses nor consumers have been left with a higher dose of uncertainty than we were used to,” Jan Hadrava, director of strategic consulting at PwC Czech Republic, told ČTK. While he views the growth in April as a respite after a difficult winter, when there was fear of a lack of energy, now, according to him, a kind of sobriety and fear of the future is coming. “But especially the mood of consumers is significantly higher, despite the decline, than it was a few months ago,” he reminded.

Comparison of indicators of confidence in the economy of the Czech Republic:

< td>Overall
Indicators May 2022 April 2023 May 2023
Industry 106.9 100, 0 91.8
Construction 117.6 101.4 101.4
Shop 103.3 100.2 97, 9
Selected Services 106.8 95.3 97.6
Total entrepreneurs 107.1 98.0 95.2
Consumers 76.6 92.9 88.5
102.0 97.2 94.1

< p>Source: CZSO