Economic sentiment in Slovakia improves slightly despite deepening of the consumer mistrust

The slight increase in the main economic confidence indicator is due to the optimism among entrepreneurs in industry and services. Consumer confidence was the worst in the last 15 months, the consumers were the most concerned about the development of unemployment.

The mood in the Slovak economy improved slightly again in November after four months. The level of the economic sentiment indicator (ESI) increased by 1.3 points to 98.8. Its increase was due to more optimistic evaluations in two of the five components of the indicator, i.e. in services and in industry. On the contrary, a less positive mood was expressed in trade and construction, and consumers were also more pessimistic.

Compared to last year, the economic mood was more negative by 1.2 points, lagging behind the long-term average by 7.2 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).

The seasonally adjusted confidence indicator in industry increased by 2.3 points in November to -1. The development of the indicator was mainly influenced by the production for the next three months, with an increase expected mainly in the chemical and pharmaceutical sectors.

The seasonally adjusted confidence indicator in services increased by 3 points in November to -0.3 points. Both the current and the expected demand increased. Demand for services rose mainly in the arts, entertainment and recreation sectors in the last three months, and it is expected to increase mainly in information and communication sectors in the next three months.

Consumer mistrust of the development of the Slovak economy intensified again in November. The consumer confidence indicator (seasonally adjusted) dropped by 1.5 points to -20.5, which is the lowest value in the last 15 months. It has currently fallen below the long-term average, albeit only slightly, by 0.3 points. Consumer pessimism was evident in three out of the four components of the indicator. They are most concerned about the development of unemployment. However, they also expect a deterioration in their household finances, they assume a deterioration of household savings, but also of the overall financial situation. They view the development of the general economic situation slightly more positively.

In November, the confidence indicator in trade dropped by 2.7 points to 12 compared to October. Respondents negatively evaluated the increase in prices of goods and expect lower business activities. Negative evaluations of price developments prevailed especially among respondents in retail trade of other household goods in specialized stores, and they expect a decline in business activities in the next three months especially in the sale of parts and accessories for motor vehicles.

In November, the seasonally adjusted confidence indicator in construction dropped by 2 points to -10 compared to the previous month. The decline was influenced by less favorable evaluations of the expected employment, especially in enterprises carrying out civil engineering works.