The confidence in the Czech economy fell in October

Published: 28.10.2021 Related countries:  United Kingdom United Kingdom

The confidence in the Czech economy fell by 0.9 points to 95.3 points in October, declining for the fourth month in a row. The reason seems to be the situation in the automotive industry.

The confidence of industrial companies in the economy has recently been affected by the unfavorable situation in the automotive industry and the lack of materials. Entrepreneurs have to cope with the constant rise in prices of input materials, and consumers are particularly concerned about prices increase.

For entrepreneurs, confidence in the economy fell by 0.6 points month-on-month to 94.7 points in October, and for consumers by 2.2 points to 98.5 points. According to the Czech Statistical Office, the slowdown in growth is mainly due to the unfavorable situation in the automotive industry and the lack of input production materials. Businesses perceive the lack of materials as a major barrier, which often leads to a decline or cessation of production and this is reflected, among other things, in significantly lower utilization of production capacity. Most of all, consumers perceive the current significant increase in the price level, with up to half of them expecting further growth in the coming months.

Confidence among industrial entrepreneurs decreased month-on-month for the fourth time, falling by 3.9 points to 88.6 since September. Industrial companies rate their current demand worse than in September and they do not see the increase in their demand in the coming months. In addition to the lack of production materials, the second most important barrier is the insufficient demand for their products.

Source: Czech Statistical Office