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Economy in Brief

Consumer Sentiment Gains in Czech Republic, Slovakia & Sweden
by Carol Stone April 27, 2004

Yesterday, the US Conference Board reported a jump in US consumer confidence in April. The comparable survey in Japan, also issued yesterday, was favorable as well. Today, three smaller economies in Europe all reported that their consumers "feel better" -- or at least, less bad.

In the Czech Republic, April's consumer survey shows a marked improvement from the very low levels of the prior two months. But at -16, this result remains below readings of a year ago and the averages for all of the past three years. Notably, this survey, which is not quite four years old, has never had a reading above zero. Thus, Czech consumers have shown some degree of uneasiness throughout the last four years.

In neighboring Slovakia, the net consumer sentiment reading is also negative. However, positive movements in both March and April appear to mark a real break-out from much recent experience, as the overall index reached its highest (least negative) since September 2002.

Finally, in Sweden, the readings are in positive territory, although their month-to-month swings made April's gain from 5.1 to 9.1 look less convincing as a indication of a sustainable uptrend in consumer optimism.

Reasons for these moves are not consistent in all of these countries. Industry sentiment weakened in Slovakia, although recent industrial production data and the Slovak stock market both look better. Industry sentiment in the Czech Republic rose in February and March, but flattened in April. Unemployment remains high there and not improved. However, industrial production and stock prices are maintaining uptrends. In Sweden, the unemployment picture is the same, unimproved, and employment itself is even down somewhat on a year ago. Stock prices are edging higher, however.

Thus, stock prices look to be the common element in the consumer sentiment picture in each country. Better equity markets buoy consumers, and hopefully will translate into more consumer spending.

% Balance Apr 2004 Mar 2004 Feb 2004 Year Ago 2003 2002 2001
  Czech Republic -16 -23 -26 -11 -15 -7 -5
  Slovakia -25.1 -28.3 -35.9 -34.9 -34.8 -30.2 -32.7
  Sweden +9.1 +5.1 +9.1 -6.9 +0.9 +7.2 +3.5
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