The GKI business climate index decreased slightly in July

The GKI business confidence index – after a 1-point increase in June – decreased by 2 points in July compared to the previous survey, thus essentially returning its value to the low level at the beginning of the year. There was no good news from the service sector, and especially from the industrial sector: the confidence indicator of the latter sector decreased by three points compared to the previous survey, while that of the former by one point. However, the values of the trade and construction indices did not change. These shifts did not change the overall picture, with construction remaining the least optimistic and business services the most optimistic sector.

The employment indicator, which indicates the aggregated staffing expectations of enterprises, fell slightly further in July. This change is not dramatic compared to June, but this indicator has slipped to an almost five-year low. In the next three months, 7% of enterprises are preparing to expand their workforce, while 13% would reduce it.

The assessment of the predictability of the business environment deteriorated slightly in July, with the worst assessment coming from industry.
The price indicator, which has been continuously declining for many months, stopped in July. The indicator, which summarizes the business sector’s pricing plans into a single number, rose, albeit very slightly, compared to the previous month. It is good news for consumers that price increase intentions in trade have further decreased. In contrast, they have increased somewhat in the other three sectors. In the next three months, 18% of companies want to increase prices, while 8% are preparing to reduce prices.

The GKI consumer confidence index remained unchanged in July compared to June. The population assessed their financial situation for the past 12 months as unchanged, while their financial outlook for the next 12 months as slightly improving compared to the previous month. The perception of their own money that can be spent on high-value consumer goods deteriorated slightly. Consumers thought the country’s economic situation for the next 12 months would deteriorate slightly compared to June – this expectation was last lower than the current level in September 2023. The population’s inflation expectations decreased, while the outlook for the expected development of the number of unemployed people deteriorated slightly.