Confidence in the assessment of the economy in July decreased the most among entrepreneurs, optimism prevailed only in the construction industry

During July 2022, the economic sentiment worsened among the majority of entrepreneurs, it decreased the most in services, only in the construction industry it improved. Consumers also showed an increase in pessimism, the level of confidence dropped to the lowest level in the last 16 months

Entrepreneurs' confidence in the development of the economy in Slovakia again experienced a slight month-on-month deterioration in July 2022. The most significant decrease in confidence occurred for the second consecutive month in services, but it also decreased in trade and slightly in industry. On the contrary, a relatively significant increase in optimism was manifested in construction due to more favorable assessments of the expected employment. However, consumers also showed an increase in pessimism, especially household concerns about expected savings increased, the level of confidence dropped to the lowest level in the last 16 months.

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

There was a decline in confidence in industry also in July, but after last month's double-digit decline, its pace slowed down significantly. The confidence indicator (seasonally adjusted) fell only slightly, by 0.7 percentage points (p.p.) to -2, primarily due to the increase in stocks of industrial products. They reported an increase in stocks mainly in manufacture of coke and refined petroleum products and other non-metallic products.

Confidence in services recorded a significant decline for the second month in a row. The confidence indicator dropped by 8.7 p.p. in July. b. to level 10.3. The evaluations were more pessimistic in all three components, in the evaluation of the economic situation in the last three months as well as in the evaluation of the demand for services in the next three months, the decline was double-digit.

The consumer atmosphere in Slovakia is also deteriorating, the consumer confidence indicator (seasonally adjusted) fell month-on-month for the third month in a row. In July, compared to the previous month, it decreased by 1 point to the level of -28.8, which is the lowest level in the last 16 months (since March last year). In particular, concerns about expected savings and the financial situation of households increased, but concerns about the general economic situation also increased. Respondents perceived the development of unemployment slightly more optimistically.

The trade confidence indicator fell by 2.3 p in July compared to June. b. to a value of 26.7. Respondents negatively evaluated the trend of business activities, especially in retail trade outside stores, stalls and markets. However, they also expect lower fulfillment of requirements for suppliers, especially in the repair and maintenance of motor vehicles and in the sale of motor vehicle parts and accessories.

The seasonally adjusted confidence indicator in construction was the only one to increase in July after the decline in the previous month.  The increase of 9.5 points to -4.5 was due to more favorable evaluations of expected employment.