Business Climate Indicator in Bulgaria Decreased by 1.4% in July Compared to June 2017

In July 2017, the total business climate indicator decreases by 1.4% in comparison with June, but continue to be above to its long-term average5 (by 7.8%), according to the National Statistical Institute (NSI).

More unfavourable business climate is registered in construction, retail trade and service sector, while in industry an increase of the indicator is observed. Industry. The composite indicator ‘business climate in industry’ increases by 1.3% compared to the previous month  as a result of the improved industrial entrepreneurs’ assessments and expectations about the business situation of the enterprises. However, their forecasts about the export  and production activity over the next 3 months are more unfavourable.

At the same time in July in comparison with April, the average capacity utilization in industry decreases (by 0.8%) and it reaches 74.7%. The main factor limiting the activity remains the uncertain economic environment followed by the shortage of labour pointed out respectively by 47.4% and 25.2% of the enterprises. Concerning the selling prices in industry, the managers expect preservation of their level over the next 3 months. Construction. In July, the composite indicator ‘business climate in construction’ drops by 3.2 percentage points  which is due to the shifting of the construction entrepreneurs’ assessments and expectations about the business situation of the enterprises from ‘better’ towards preserving ‘the same’.

The inquiry reports an improvement of the present construction activity, as the forecasts over the next 3 months remain favourable though more reserved compared to the previous month. The uncertain economic environment and competition in the branch continue to be the most serious difficulties for the business development.

As regards the selling prices in construction, the managers’ expectations are them to remain unchanged over the next 3 months

The composite indicator ‘business climate in retail trade’ decreases by 2.9% as a result of the more unfavourable retailers’ expectations about the business situation of the enterprises over the next 6 months. However, in their forecasts about the volume of sales and orders placed with suppliers over the next 3 months slight optimism is registered.

The main problems for the activity remain connected with competition in the branch, insufficient demand and uncertain economic environment, although in the last month a decrease of their negative impact is reported. Concerning the selling prices, the retailers foresee preservation of their level over the next 3 months.

 In July, the composite indicator ‘business climate in service sector’ decreases by 3.3% which is due to the shifting of the managers’ assessments and expectations  about the business situation of the enterprises from ‘better’ towards preserving ‘the same’. Their opinions about the present and expected demand for services are also more reserved. The competition in the branch and uncertain economic environment continue to be the factors limiting with most extend the business in the sector . As regards the selling prices, the prevailing managers’ expectations are them to remain unchanged over the next 3 months.

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