Consumer confidence continued to decline, on the contrary, the sentiment in the Slovak economy rose slightly

Consumer mistrust deepened again, in the last month of the year the consumers' mood was the worst since August 2023. They mainly perceived the development of the general economic situation negatively. However, they were also worried about the unemployment development and expected a deterioration of the overall financial situation. Atmosphere among entrepreneurs was the opposite, entrepreneurs in services, industry and construction were optimistic.

The improvement in mood in the Slovak economy from last month continued in December. The economic sentiment indicator (ESI) increased by 7.8 points and reached the level of 106.6. Mood improved in three out of the five components of the indicator. Entrepreneurs in services, industry and construction were more optimistic. On the contrary, entrepreneurs and consumers were more pessimistic.

Compared to last year, the economic mood was more favorable by 6.1 points, exceeding the long-term average by 0.6 points.

The economic mood is measured by five sub-indicators, which express the expectations and confidence of entrepreneurs in four sectors (industry, construction, trade and services) and consumers. Partial indicators range from -100 points (maximum pessimistic answers) to +100 points (maximum optimistic answers).

After seasonal adjustment, the confidence indicator in industry rose by 7.7 points to 6.7 in December. The development of the indicator was mainly influenced by the expected production for the next three months and by the decrease in the finished goods stock, especially in manufacture of transport equipment. Production growth is expected also in manufacture of other non-metallic products and in manufacture of machinery and equipment n.e.c.

The seasonally adjusted confidence indicator in services rose by 14.6 points to 14.3 in December. All sub-indicators recorded an increase. The business situation improved the most in financial and insurance services, where they also recorded the highest demand for services in the last three months. In the next three months, accommodation and food services are expecting it in particular.

The decline in the confidence of the Slovak consumers continued even in the last month of this year, its reduction occurred for the fifth consecutive month. The consumer confidence indicator (seasonally adjusted) decreased by 0.3 points month-on-month to -20.8, which is the lowest level since August 2023. The indicator is below the long-term average by 0.6 points. Consumers were more pessimistic in three out of the four components of the indicator. They mainly perceive the development of the general economic situation more negatively. However, they are also concerned about the unemployment development and expect a deterioration of the overall financial situation. They showed moderate optimism only in the creation of savings.

The confidence indicator in trade in December dropped by 1 point to 11 compared to November. Respondents negatively evaluated the increase in the prices of goods and expect a lower number of employees. They expect an unfavorable development of prices especially in repair and maintenance of motor vehicles. They plan to reduce the number of employees mainly in retail trade of fuels in specialized stores.

In December, compared to the previous month, the seasonally adjusted confidence indicator in construction rose by 2 points to -8 due to more favorable evaluations of the expected employment, primarily due to the impact of enterprises carrying out civil engineering works.