Confidence in the Czech economy fell slightly by 0.3 points to 89.8 in October. The so-called aggregate confidence indicator fell below 90 points for the first time since last March. It has been declining for five months in a row.
The decline slowed considerably in October and stood at four points in September. Confidence has fallen among businesses and consumers. In the case of consumers, it deepened to its lowest since the survey began in January 2003. This is according to data published by the Czech Statistical Office (CSO) on Monday.
Business confidence fell by 0.2 points to 93.4 points in October, while consumer confidence fell by 0.8 points to 71.9 points.
“Households’ fears of deteriorating their financial situation are the highest on record. There is also great concern about the development of the overall economic situation and rising unemployment. On the contrary, the decreasing fears of further price increases can be perceived positively,” said Silvie Vyplašilová from the CSO’s economic surveys department.
Business confidence in the industry fell by more than two points to 91.4 points and construction by more than 110.2 points. In the case of industry, it was lower in October last year, and in the case of building, it was lower in January the previous year.
“Great uncertainty about future developments, material shortages, deteriorating demand, and high prices. These are the four main factors that have been fundamentally affecting the development of business confidence in the industry in recent months,” said Jiří Obst, head of the CSO’s economic surveys department.
On the other hand, business confidence in trade increased by 6.6 points to 99.3 points after four months of decline. It thus reached the level of June this year. Business confidence in services also rose, slightly by less than a point to 92.9 points.
In a year-on-year comparison, confidence in the Czech economy is lower this October in all categories except for entrepreneurs in the industry. For them, it was below 88 points a year ago.
On the other hand, the most significant drop—almost 30 points—is in consumer confidence, which was 101.3 points last October. The overall confidence indicator fell by 6.2 points year-on-year.