In this week’s Business News: economic confidence continues to recover; regional rail services battle heads to Brussels; winner of first state PPP project selected; China fuels Škoda Auto sales surge; and crisis hits DIY giants.
Confidence in the Czech economic outlook inched upwards in May. The combined index of consumer and business confidence advanced by 0.2 points compared with April and was 14.4 points higher than the low levels of a year earlier. The overall month-on-month improvement came in the face of greater fears about the future from consumers. Analysts say they are still worried about the state of the jobs market. Czech consumer confidence nosedived in mid-2008 but has been creeping upwards over the last year. A separate survey by international consultants PriceWaterhouseCoopers showed more than half the bosses at the biggest Czech companies expect a rise in sales this year.
A long running battle between long distance coach operator Student Agency and a handful of regional authorities over local rail services has arrived at the European Commission in Brussels. The Brno-based company has dispatched a complaint alleging that four regional authorities broke basic European competition rules when they ignored its cheaper and better bids to provide local rail services and instead signed 10-15 year contracts with state-owned company Czech Railways. Student Agency says the European Commission is near to making a decision about two similar cases from Germany with the results looking favourable for its own complaint.
The government this week selected its first Public Private Partnership (PPP) project. Under this format companies usually team up with the state to build some infrastructure or provide a service under long term contracts. In this case, construction company Metrostav was selected by the Ministry of Defence to build accommodation for staff and a hotel for visitors at Prague’s Central Military Hospital. Czech governments have long wavered about the benefits of PPP projects but they could soon be all the rage with the left of centre Social Democrats earmarking them as a key part of its economic programme.
The country’s biggest car producer, Škoda Auto, has continued its bright start to the year with sales up 3.5 percent in April compared with a year earlier. Sales in China jumped 31 percent to just over 12,100. That made it the single biggest source of demand for Škoda cars in April, overtaking the traditional market mainstay, Germany. Total Škoda car sales since the start of the year have climbed 18.6 percent to just under 250,000.
The Czech love for do-it-yourself shops has cooled. For the first time since they flooded into the country overall sales from the five biggest chains declined in 2009, according to figures from market survey company GfK Incoma. Sales fell back to 27.6 billion crowns from the previous year’s 29.8 billion as the economic crisis began to bite. The figures seem to scuttle one theory that turnover in the DIY sector can fly in the face of an economic downturn.
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