The overall confidence indicator in the Czech economy showed a slight decline in January. While business confidence in industry improved, consumer confidence dropped, reaching its lowest level since February last year.
The overall confidence indicator (economic sentiment indicator) decreased by 0.3 points compared to December, standing at 97.4. However, the two components of the index displayed different trends: the business confidence indicator increased by 0.4 points to 97.5, while the consumer confidence indicator fell by 3.4 points to 97.1.
Business confidence in the economy rose in January, driven solely by the industrial sector (+4.3 points). In contrast, confidence dropped by 3.4 points in selected service sectors and by 1.8 points in construction, while it remained largely unchanged in trade, with a small decline of 0.8 points.
‘Business confidence in the economy only increased in industry at the start of the year. This is due to expected growth in the manufacturing sector over the coming months. However, industrial companies are still facing demand issues, with more than half of them citing this as the biggest obstacle to growth,’ explained Jiří Obst, Head of the Economic Surveys Department at the Czech Statistical Office (ČSU).
Consumer confidence declined compared to the previous month. The proportion of consumers who expect the overall economic situation in the Czech Republic to worsen over the next twelve months has risen slightly for the second consecutive month. In January, the share of households fearing a deterioration in their financial situation over the next year also increased. Additionally, more households reported that their financial situation had worsened in the past twelve months. On the other hand, the proportion of consumers who believe the current period is unsuitable for major purchases remained virtually unchanged.
‘In January, consumer confidence fell below its long-term average for the first time in three months, reaching its lowest level since February last year. Households assessed their financial situation more negatively than in the previous twelve months, and their concern about a potential decline in the overall economic situation in the Czech Republic grew,’ said Anastasija Neradová from ČSU’s Economic Surveys Department.
