Overall, confidence in the Czech economy declined in March, due to deteriorating sentiment in the business sector and among consumers. Although the industry remains spared the lockdown, discussions about the possibility of its introduction during the holidays certainly did not leave the mood of companies indifferent .
After a brief improvement in industry, the mood deteriorated again in February, reflecting lower expected production, demand, exports and employment for the next three months. However, the question is to what extent these are only concerns about possible closures and to what extent today’s figures reflect the real condition of this largest domestic sector, which has to deal with rising input prices, a shortage of imported components and uncertain foreign demand. Due to the fullness of order books and high payment morale, it is more of a psychological effect of a potential lockdown.
While lockdown is a potential threat to industry , business has been experiencing it for many months. It is therefore not surprising that the mood of traders deteriorated further and their pessimistic expectations for the coming months.Similarly, there are services where expectations for the coming months are also not optimistic. With the unclear end of restrictions, companies lack any point of reference to which they could cling, but a slight optimism, at least in the three-month outlook, is already evident here, in contrast to January and February.
The only sector where sentiment has improved is construction . Optimistic expectations for the coming months go hand in hand. with fulfilling order books and improving payment discipline in the industry . His main concern and will continue to be a lack of staff.
Overall, the results are exploration sentiment in the Czech economy so surprising. fit into the context of a pandemic situation and the continuing lockdown, whose end is not yet not obvious This can also be seen in the negative sentiment of consumers, who are increasingly worried about unemploymentand a further deterioration of the overall economic situation. In any case, mood surveys suggest that the growth of the Czech economy in the first quarter will be zero at best.
Source: Petr Dufek, ČSOB and Patria-cz
