Business Climate in Bulgaria Improved Slightly in July

In July 2012, the total business climate indicator, increased by 1.1% on the month, with improvements registered in the spheres of industry and construction and retail trade, while the services sector posted a decline.

The main problems for the business sector as a whole are the uncertain economic environment and the insufficient domestic demand, followed by the competition in the respective sectors, according to data of the National Statistical Institute (NSI).

In July 2012, the complex "business climate in the industry" indicator increase by 1.9 percentage points mainly due to increasingly optimistic expectations of managers for the financial condition of the companies over the next 6 months.

According to NSI data, the average capacity utilization in July 2012 increased by 1.4 percentage points to 71.3% compared to April 2012.

Companies reported a surplus of capacity against the backdrop of the anticipated demand in the months to come.

As regards selling prices, managers continue to expect increases over the next 3 months.

In July 2012, the business climate in the construction sector increased by 1.6 percentage points.

Construction entrepreneurs say that construction activity is improving and their forecasts for the next 3 months remain favorable, although somewhat more reserved, as compared to June.

The production schedule has been guaranteed with contracts for 5.5 months, down by 0.5 months from the April assessment.

Meanwhile, expectations for new orders in the next six months are more unfavorable.

As regards selling prices in the sector, entrepreneurs expect the rates to remain unchanged over the next 3 months.

In July 2012, the complex indicator "business climate in retail trade" increased by 1.4 percentage points.

There is growing optimism in entrepreneurs' expectations about sales and orders placed with suppliers over the next 3 months.

Selling prices in the retail sector are expected to increase over the next 3 months.

In July 2012, the complex "business climate in the service sector" decreased by 1.5 percentage points on the month due to the trimmed down expectations of managers about the financial condition of the companies.

As regards demand for services, the trend is considered to have improved but is likely to deteriorate over the next 3 months.

Most managers expect selling prices to remain unchanged over the next 3 months.

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