Business Conjuncture in Bulgaria - October 2015

In October 2015 the total business climate indicator in Bulgaria increases by 1.0 percentage point in comparison with the previous month which is due to the improved business climate in industry, construction and retail trade.

Industry. The composite indicator ‘business climate in industry’ increases by 2.3 percentage points compared to September as a result of the favourable industry entrepreneurs’ assessments and expectations about the business situation of the enterprises. At the same time, in their expectations for activity in the branch over the next 3 months some optimism has been observed, although it is more moderate in comparison with the previous inquiry.

In October the average capacity utilization is by 1.8 percentage points below its July level and it reaches 72.5%, as regards the expected demand over the next months the enterprises forecast a surplus of capacity.

The main factor limiting the activity in the branch remains the uncertain economic environment, though in the last month a decrease of its negative impact was observed. In the second and third place are ‘the insufficient domestic demand’ and ‘weakness in economic legislation’.

As regards the selling prices in industry the managers expect preservation of their level over the next 3 months.

Construction. In October the composite indicator ‘business climate in construction’ increases by 0.6 percentage points which is due to the improved construction entrepreneurs’ assessments about the present business situation of the enterprises. At the same time their forecasts about the construction activity over the next 3 months remain favourable, though more moderate compared with September.

The production is assurance with contracts for 4.4 months as a decrease of 0.8 months compared to the assessment from July is registered. Тhe managers' expectations about the new orders over the next 6 months are also more unfavourable.

The main obstacles for the business development in the branch continue to be connected with the uncertain economic environment, competition in the branch and financial problems, as in the last month strengthening of their negative influence was observed.

Concerning the selling prices in construction the prevailing managers’ expectations are for them to remain unchanged over the next 3 months.

Retail trade. The composite indicator ‘business climate in retail trade’ increases by 1.3 percentage points compared to September - a result of the optimistic retailers’ expectations about the business situation of the enterprises over the next 6 months. Their forecasts about the orders placed with suppliers from both domestic and foreign market over the next 3 months are also more favourable.

The main factors limiting the development of the activity in the branch remain the competition in the branch, uncertain economic environment and insufficient demand, though in the last month a decrease of their negative impact was observed.

As regards the selling prices in retail trade the managers expect preservation of their level over the next 3 months.

Service sector. In October the composite indicator ‘business climate in services sector’ decreases by 1.8 percentage points due to the shifting of the managers’ expectations about the business situation of the enterprises over the next 6 months from ‘better’ towards preserving ‘the same’. Their opinions as regards the present demand for services, as well their expectations over the next 3 months are reserved.

The uncertain economic environment and competition in the branch continue to be the main obstacles for the business development in the branch, pointed out respectively by 48.5% and 40.7% of the managers.

Concerning the selling prices in the sector the prevailing expectations are them to remain unchanged over the next 3 months.

Source: National Statistical Institute