Impact of Macroeconomic Indicators on the Financial Stability of Construction Companies in the Czech Republic and Spain

The purpose of this study is to identify the relationship between macroeconomic factors and the financial stability of companies based on a comparative analysis of the construction industry in the Czech Republic and Spain for the 2007-2015 period. The negative impact of the 2007 financial crisis on the country economy, and thus on the construction industry, is a clear illustration of the dependence of the financial health of the construction sector on the economic stability of the country. This observation leads to the necessity of determining the relationship between the external factors and the financial stability of companies. The most common and available macroeconomic indicators of economic health of the country were selected for the purpose of this research: GDP, Inflation and Unemployment Rate. In order to find the relationship between the chosen macroeconomic indicators and financial ratios, Pearson Correlation and Pooled Ordinary Least Squares Regression, were applied. According to the results of the correlation, the majority of macroeconomic indicators have a weak positive and negative relationship with the financial coefficients of companies. In both countries, the most significant is the relationship between unemployment and liquidity of enterprises. In addition, in the Spanish construction industry, a negative correlation between ROE and unemployment has been observed. The regression analysis pointed out the impact of GDP on the liquidity of construction companies in Spain. In the Czech Republic, due to relatively stable situation in the period researched, insignificant relation between the selected macroeconomic indicators and financial stability of the country's construction industry have been revealed.