Entrepreneurs' confidence in the Slovak economy did not change significantly in September, though consumers were more sceptical

In September, economic sentiment was the worst since March last year, dropping the most among consumers. There was a slight deterioration also in services, on the contrary, slight optimism was manifested in industry. In construction and in trade, it remained unchanged at last month's level.

Consumers' confidence in the development of the Slovak economy dropped the most in September, while entrepreneur's confidence did not change significantly compared to the previous month. The month-on-month decrease occurred only in services, on the contrary, it increased slightly in industry. Confidence in construction and in trade remained unchanged at the level of the previous month.

Economic sentiment 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 confidence indicator in industry (seasonally adjusted) increased again month-on-month after three months of decline in September. The growth by 0.3 percentage points (p.p.) to the value of -7.7 was mainly contributed by the expected growth of industrial production, especially in manufacture of transport equipment and machinery and equipment n.e.c.

Confidence in services is decreasing, the confidence indicator reached a negative value for the first time in 17 months. With a month-on-month decrease by 1.4 points, it dropped to the level of -0.7 due to the deterioration of both demand indicators. In demand for the last three months, the rating dropped by 6 points to -4 and in expected demand by 2 points to 11.

The pessimistic perception of the consumer atmosphere in Slovakia persists, the consumer confidence indicator (seasonally adjusted) dropped to -34.1 in September. Compared to the previous month, it decreased by 4.7 points, while its value has been decreasing for the fifth consecutive month.  Respondents evaluated all four components of the indicator more pessimistically, concerns about the expected development of unemployment increased the most month-on-month. However, concerns about the expected general economic situation, the financial situation of households and related household savings also increased.

The confidence indicator in trade remained at the same level (23) in September compared to August. Respondents expected an increase in business activities, primarily in the sale of motor vehicle parts and accessories and in specialized retail stores with ICT equipment. At the same time, however, they assumed an increase in the prices of goods, especially in specialized fuel retail stores.

Confidence in construction did not change compared to the previous month, the seasonally adjusted confidence indicator remained at -12. The development was influenced by the deterioration of the overall level of orders, but this was eliminated by the favorable assessment of expected employment.