Little Change in Business and Consumer Confidence in the Czech Republic and Slovenia

Confidence indicators for the Czech Republic and Slovenia were published today. They give a mixed picture. Consumer confidence was up in the Czech Republic and down in Slovenia; confidence in industry was down slightly in the Czech Republic while confidence in manufacturing was unchanged in Slovenia.

Over the last five years consumers in Slovenia have had little confidence in the economic outlook. Pessimist have outweighed optimists over the whole period. In the latest survey in January pessimists outweighed optimists by 24%, the third largest excess of pessimists in the whole period. While consumers in the Czech Republic have not exactly been brimming with confidence, from mid 2005 to early 2007, there were frequent periods when the optimists exceeded pessimists if only by a small margin. Beginning in April of last year, however, the pessimists began to exceed the optimists rising to an excess of 14.6% in December. In the latest survey, the excess of pessimists has dropped to 9.9%. Consumer confidence in Slovenia and the Czech Republic are shown in the first chart.

In the business community, the optimists have generally outweighed the pessimists by a small margin over the last five years. The survey of business opinions is broader in the Czech Republic and than in Slovenia. In Slovenia, only businesses engaged in manufacturing and retail trade are canvassed, while in the Czech Republic, industry, construction, trade and services are canvassed. In both countries it has been the more positive outlook for trade that has accounted for the overall optimism of business. In January, the excess of optimists over pessimists in trade rose by 1 percentage point in the Czech Republic, but although it fell 7 percentage points in Slovenia. It was 8 percentage points above January, 2007. In the case of the Czech Republic, the prevailing optimism in the service businesses has also added to the overall optimism while the prevailing pessimism in the construction industry has subtracted from it. The second and third charts show the business confidence indicators for the two countries.