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Slovakia and Poland are increasingly optimistic about the economy

Business Sentiment Index, 4th edition

The results of the fourth Business Sentiment Index from Deloitte Central Europe (published on October 12, 2010) show that executives across the countries surveyed remain cautious but optimistic about economic recovery in the region.

Since the first survey in September 2009, the overall outlook has become increasingly positive. Opinion remains divided about the speed of recovery, however, when analysing individual countries' responses, suggesting some economies in Central Europe are bouncing back faster than others from the financial crisis.

Slovakia, for instance, is the clear 'winner' of this survey in terms of positive sentiment, with 71% of executives now believing general prospects for the economy over the next six months are improving. This is a significant jump of over 24% from the results of April 2010, in which 47% felt this to be the case. There is also increased optimism in Slovakia about the availability of credit with 81% of executives saying that credit is available compared to 53% in September 2009. The steadily increasing number of positive responses reflects the improving economic situation in the country.

In previous surveys, Poland has consistently been the most positive of all the six countries surveyed, so it is interesting that Slovakia now reports a similar rise in outlook to its neighbour.
It's not all good news however: whilst the results of the survey broadly show that confidence is slowly returning, responses from other countries are much more muted than in Slovakia and Poland. Hungary, for instance, remains fairly static in outlook. Meanwhile, although Croatia and the Czech Republic see greater optimism in general economic prospects, overall they remain fairly cautious about the next six months. Romania, which sees a good jump in optimism overall, records a 10% drop in positive sentiment about economic prospects (now 37%, down from 47% in April 2010).

Report highlights:  

  • There is a greater expectation of spending on capital goods over the next 12 months. Since the first survey, twice as many executives are now optimistic about increased capital expenditure (41% of respondents, compared to 19% in September 2009).
  • Similarly, twice as many executives (25%) now believe employment levels will rise over the next 12 months – compared to just 12% believing this in September 2009.
  • Executives are becoming increasingly more optimistic that credit is available, with 40% now saying it is 'easily' available.
  • Opinion about regulatory changes to markets following the global economic crisis is, in the main, optimistic. Slovakia sees the greatest jump in positive sentiment about an improvement in the regulatory environment, with 42% now thinking it will be less restrictive, compared to no executives at all thinking this in April 2010. 

Responses to the questions of capital expenditure, employment and credit availability are positive – but the rate of recovery remains slow and cautious for countries in the region. Only two – Slovakia and Poland – show definite signs of a more accelerated recovery. Once again, the Deloitte Business Sentiment Index proves that there is no 'quick fix' for economies in Central Europe.

Background to the index  

The index is a research-based analysis of the opinions and predictions of executives from the largest companies in Croatia, Czech Republic, Hungary Poland, Romania and Slovakia. Deloitte published the findings of the first Business Sentiment Index in September 2009. The sample size encompassed almost 200 executives from the largest companies in the region.

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Contacts

Name:
Ana Kovačec Cofek (2.1)
Company:
Deloitte Croatia
Job Title:
MCBD Coordinator
Phone:
+385 1 2351 900
Email
acofek@deloittece.com

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