Slovakia’s Economic Sentiment Weakens in June as Business Confidence Declines

Economic sentiment in Slovakia weakened in June after improving during the previous two months, as confidence declined across several business sectors despite a modest improvement in consumer sentiment, according to the Statistical Office of the Slovak Republic.

The Economic Sentiment Indicator (ESI) fell by 2.3 points month-on-month to 97.8. Although sentiment weakened compared with May, it remained 1.8 points above its level a year earlier. The index also remained 7.9 points below its long-term average.

The decline was driven primarily by weaker confidence among businesses in industry, construction and retail, while service sector companies and consumers reported a more positive outlook.

Industrial confidence recorded the sharpest deterioration, falling by 7.3 points to -6.7. Manufacturers reported lower production expectations for the next three months, rising inventories of finished goods and weaker order books. The largest declines were recorded among producers of wood and paper products, transport equipment, and computer and electronic products.

Confidence in the services sector improved by 2.7 points to 9.7. Businesses reported stronger current and expected demand, particularly in administrative and support services, although assessments of recent business conditions weakened compared with the previous survey.

Consumer confidence also improved modestly. The consumer confidence indicator increased by one point to -27.3, although it remained well below its historical average. Households expressed greater optimism about their future financial situation, the broader economy, unemployment and their ability to save.

Retail confidence declined by 3.3 points to -1.3. Businesses reported weaker trading activity over the previous three months and higher inventory levels, particularly among motor vehicle retailers, electronics retailers and fuel stations. Expectations for future business activity remained positive.

Confidence in the construction sector fell by 3.0 points to -4.5. Construction companies reported weaker order books and less favourable expectations for future employment, with the largest deterioration recorded among civil engineering contractors.

Overall, the June survey indicates that while Slovak consumers have become slightly more optimistic, businesses remain cautious as weaker industrial activity and softer order volumes continue to weigh on economic confidence.