Czech economic confidence declines in April

Overall confidence in the Czech economy declined in April, according to the Czech Statistical Office’s latest business cycle survey. The composite confidence indicator, which reflects sentiment among businesses and consumers, fell by 2.8 points month-on-month (m-o-m) to 96.7.

Business Confidence

The business confidence indicator dropped by 3.1 points to 96.5. Among individual sectors:
• Industry: Confidence declined by 4.5 points to 90.3. While assessments of current demand and inventory levels remained largely unchanged, expectations for production growth increased slightly for the first time in five months. The proportion of businesses citing insufficient demand as the main barrier to production fell to 44% (from 53% in January), though 21% still reported material or equipment shortages. Year-on-year (y-o-y), confidence in industry is lower.
• Construction: Confidence rose slightly by 0.6 points to 116.4. Fewer firms reported weak demand or rising prices as concerns, though staff shortages remain the main constraint, affecting 38% of respondents. Compared to April 2024, confidence in construction is higher.
• Trade: Confidence dropped by 2.0 points to 100.2. Entrepreneurs had a less positive view of the current economic situation, while expectations for improvement and stock levels remained stable. Fewer businesses anticipate price increases in the near term. Confidence is higher than a year ago.
• Selected Services (including finance): The indicator decreased by 2.0 points to 100.3. While current demand assessments remained positive, fewer businesses expect demand to rise in the coming months. Half of respondents reported no production-limiting barriers, up from 43% in January. Fewer businesses reported insufficient demand, but other constraints such as regulation and wage costs were cited. Compared to last year, confidence in services is higher.

Consumer Confidence

Consumer sentiment also declined, with the confidence indicator down 1.1 points to 97.7. A greater number of consumers expect the overall economy and their personal financial situation to worsen over the next year. Although perceptions of current financial conditions remained stable, fewer households plan major purchases. Concerns about unemployment eased, but fears of further price increases rose sharply. Consumer confidence is lower than in April 2024.