Business Conjuncture, February 2013

In February 2013 the total business climate indicator4 increases by 5.7 percentage points compared to the previous month due to the more favourable managers’ opinions from all observed sectors - industry, construction, retail trade and service sector.

Industry. The composite indicator “business climate in industry” increases by 3.6 percentage points in comparison with its January level due to the improved managers’ assessments about the present business situation of the enterprises. The present production activity is assessed as decreased, while in the expectations about the business situation and the activity in the branch over the next months some optimism has been observed but it is more moderate compared to the previous inquiry.

The uncertain economic environment and the insufficient domestic demand remain the main factors limiting respectively 54.1% and 44.5% of the industrial enterprises in the branch.

Concerning the selling prices the expectation are to preserve their level over the next 3 months.

Construction. In February 2013 the composite indicator “business climate in construction” increases by 4.1 percentage points which is due to the more optimistic construction entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. Their expectations about the construction activity over the next 3 months are also more favourable which is accompanied by intention of additional hiring of personnel.

The main obstacles for the development of the business in the branch continue to be connected with the uncertain economic environment and financial problems. However in the last month the inquiry reports strengthen the negative impact of the factor “insufficient demand” which shifts from the third place the factor “competition in the branch”.

As regards selling prices in construction the prevailing expectations are they to remain unchanged over the next 3 months.

Retail trade. The composite indicator “business climate in retail trade” increases by 11.7 percentage points compared to January 2013 due to the improved managers’ assessments and expectations about the business situation of the enterprises. The raised optimism in retailers’ forecasts as regards both the volume of sales and the orders placed with suppliers over the next 3 months are registered.

The main factor limiting the activity in the branch remains the uncertain economic environment as in the last month an increase of its negative impact is observed. On second place is insufficient demand which negative impact decreases by 14.4 percentage points compared to January.

The expectations about price movements in retail trade over the next 3 months are for an increase.

Service sector. In February 2013 the composite indicator “business climate in service sector” increases by 5.3 percentage points which is due to the more optimistic managers’ assessments and expectations about the business situation of the enterprises. Their expectations about the demand for services over the next 3 months are more favourable but it is not accompanied by intentions of additional hiring of personnel.

The main problems for the business development in the branch continue to be the uncertain economic environment, competition in the branch and insufficient demand.

The prevailing managers’ expectations regarding the selling prices in the service sector are for preservation of their level over the next 3 months.

Source: National Statistical Institute