This week in Business News: The construction sector in the Czech Republic is expected to restart growth in 2014; Škoda Yeti was voted the most popular car by British car owners; ČEZ has asked two remaining contenders in the Temelín expansion deal to submit better offers; Economic confidence is down in April, after two straight months of improvement; The Federation of Food and Drink Industries wants to introduce stricter rules on product labeling; Trade unions and employers reach no agreement on minimum wage increase.
The Czech construction industry, which has suffered a significant downturn in the past five years, is finally expected to pick up in 2014. The volume of production in construction has fallen by more than 22% since 2008, but the general director of Skanska for the Czech Republic and Slovakia told the Hospodářské noviny daily that as the economy picks up speed, the construction business will as well. According to recent estimates of the Czech National Bank, the Czech economy should grow by 2.1 percent next year. Another piece of good news is that the fall of real estate prices seems to have stopped in February, while in Prague developers have sold 25% more new apartments in the first quarter than at the same period last year.
Škoda is the most popular car in Britain this year, according to one of the best selling motorist magazines in the UK, Auto Express. The Škoda Yeti won first place in the magazine’s reader poll, and the Superb and Octavia models made it into the top 10 list. Although Škoda had been voted most popular by users for four years in a row now, in terms of sales it is still not among the top brands in Britain, notes the news server iHned.cz. For the German-owned company, though, the UK is an increasingly profitable market, at a time when their sales have taken a hit in all other European countries. More than 53,000 people in Britain chose to buy a Škoda in 2012 - 18% more than in the preceding year.
The state-owned energy company ČEZ has asked the two candidates vying for the Temelín expansion tender to improve their offers. After an initial evaluation of the bids, ČEZ representatives met with the American-Japanese company Westinghouse and the Russian-Czech Consortium MIR.1200 twice in April and asked both candidate companies to present better offers. The final results of the tender for the construction of two more reactors at the Temelín nuclear power station should be announced this fall.
While confidence in the domestic economy grew in February and March, this month it decreased again by almost 3 index points to -5.3. This is the worst confidence rating since the end of 2009, which analysts interpret as a sign that the Czech economy will remain in recession until mid-year. Economic confidence was down from the previous month in almost all sectors, though consumer confidence was higher in April than a year ago.
Following a slew of scandals involving imported produce, the Czech Federation of Food and Drink Industries is planning to introduce a new regulation that would require supermarkets to provide exact information about the percentage of Czech-made products sold in each of their stores. The draft amendment that the federation is planning to submit for consideration will also introduce stricter rules about marking the origin of products, as well as a more precise definition of what constitutes a Czech-produced food product.
Trade unions and employers on Thursday failed to agree on a planned minimum wage increase in 2014, leaving the decision in the hands of the government. While trade unions demanded a 600 crown raise, employers would not go higher than 400. Social Affairs Minister Ludmilla Mullerová said she would present both options to the cabinet for a final decision. The minimum wage is currently 8,000 crowns before tax and has not been raised since 2007.
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