ISSUE #106

FINANCE: Paying on credit
More and more Czechs are using the option of making purchases without paying the full amount up front, so this year installment plan sales will probably break last year’s record. This August Multiservis recorded a year-on-year increase in loans of 50%, and Cetelem recorded a 60% jump. These companies offer more affordable services, in particular expanding their portfolios. “We recorded significant growth in volume, especially thanks to new credit cards, another factor being car financing at rates starting at 4.99%,” explains Martin Gibiec, a Cetelem representative in the Czech Republic. The value of provided loans will also rise in the future, due to relatively low Czech household indebtedness as compared with western Europe. “The growth curve won’t probably be as sharp as in recent years, but willingness to take out loans won’t weaken,” Gibiec concludes.


REAL ESTATE: More vacant offices in Prague
According to the mid-year report from Prague Research Forum, which has been established by the largest office leasing agents, the current vacancy rate for office space reached almost 14% at the end of June 2004. The high amount of new stock, which was not counter-balanced by a rise in demand, resulted in increased levels of vacancy. Office take-up during the first six months of this year decreased for about 33% compared to the same period in 2003. Even the amount of space that companies rent is getting smaller. The average leasing deal in Prague reached 1,172 m2 in 2003, while due to the absence of larger deals, it dropped to 519 m2. in the first half of 2004.

EMPLOYMENT: Czech employees still not productive enough
According to the fourth international work productivity study by Czipin & Proudfoot Consulting, the average Czech employee wastes 103 days a year at work. Overall, 85 days out of 225 work days are squandered, with only 140 days fully used. The most productive sectors were determined to be telecommunications and automotive industry. The research, which covers companies with more than five hundred employees in ten countries, showed that Czechs’ active use of work time is rising, but very slowly. Experts see the main factors reducing productivity as insufficient managerial planning and inadequate control, inefficient communication, poor work morale, and IT-related problems.

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