The confidence of Slovak consumers dropped the most since the Covid pandemic, but remained above the level of the long-term average

Consumers perceive the development of the general economic situation more negatively, but they are also concerned about the deterioration of the creation of savings, the overall financial situation, and unemployment. Entrepreneurs in services and industry were also more pessimistic.

In October, the economic mood of Slovak entrepreneurs and consumers deteriorated for the fourth consecutive month. With a decrease by 4.8 points, the value of the economic sentiment indicator (ESI) was 97.5, which is the lowest level in the last year. Evaluations deteriorated in three of the five components of the indicator, i.e. services, consumers and industry. Optimism was reported by entrepreneurs in trade and slightly in construction.

Compared to last year, the economic mood was more optimistic by 1.9 points, lagging behind the long-term average by 8.5 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 dropped by 2 points to -3.3 in October. The development of the indicator was mainly influenced by the higher finished goods stocks and by the decrease in expected production for the next three months. The increase in the level of stocks, as well as the decrease in expected production, were reported mainly in manufacture of transport equipment. However, they also expect a decrease in the chemical industry and in manufacture of machinery and equipment n.e.c.

In October, the seasonally adjusted confidence indicator in services dropped by 9.3 points to -3.3 points. All indicators of the indicator recorded a decrease. The business situation, as well as the demand for the last three months, deteriorated especially in other services, they expect a decrease in demand for the next three months in administrative and support service activities.

The confidence of Slovak consumers decreased again in October, its decrease by 7.1 points was the greatest since the beginning of the Covid period, i.e from April 2020. The consumer confidence indicator (seasonally adjusted) thus dropped to -19. It currently exceeds the long-term average by only 1.2 points. Consumers were more pessimistic with all four components of the indicator. They have a significantly more negative perception of the development of the general economic situation, but they also expressed concern when evaluating the creation of household savings, the overall financial situation, and unemployment.

In October, the confidence indicator in trade rose by 6.7 points to 14.7 compared to September. Respondents positively evaluated the development of business activities, both their current trend and their future development. Up to now, they positively evaluated the business activities mainly in retail trade not in stores, stalls and markets, in the upcoming period they are assumed mainly in repair and maintenance of motor vehicles.

In October, compared to the previous month, the seasonally adjusted confidence indicator in construction rose by 0.5 points to -8 due to more favorable evaluations of the overall level of orders. Up to 78% of respondents consider it sufficient.