End of 2020 was slightly positive, but still with threats and uncertainty

Despite of difficulties and uncertainty we observe some positive tendencies in foreign and domestic demand. Nevertheless expectation of contracts are still under influence of corona-crisis.

In more detail the last survey of the year 2020 shows mild improvement in the evaluation of domestic and foreign demand despite difficulties. Although there is a prevailing negative evaluation in the area of demand, the dominance of the negative response is shrinking.

The expectations in the area of contracts for the 1st quarter of 2021 are not reflecting the positive development of the economy at the end of 2020 (by the end of 2020 we registered mild slight growth of industry, positive development of exports based on statistical data, lower than the expected downturn of the GDP indicator – all these gently optimistic results can positively affect the final average 2020 data). We anticipate a slow, gradual improvement in these indicators but it’s obvious that economic recovery and smoothing out the loses of enterprises in many sectors of the economy will take quarters or years. The outlook of contracts from the point of view of respondents is a bit optimistic. In a half year outlook horizon there is a prevailing majority of growth in development of contracts.

The expectation of corporate investment is positive compared to the previous quarters of this survey. In one year horizon, a bigger part of corporate respondents plan to increase investment revenues. Unfortunately, these kinds of questions about expectations are affected by the low benchmark of investment during 2020.

A quarterly survey has been  given by the Confederation of Industry of the Czech Republic and the Czech national bank since 2011.

The whole survey can be downloaded here.

Author: Vladimír Štípek