Business Conjuncture improvement in October 2020 in comparison with the previous month

In October 2020, the total business climate indicator increases by 0.5 percentage points in comparison with the previous month. An improvement of the business conjuncture is registered in construction, retail trade and service sector, while in industry the indicator has decreased.

Industry.
The composite indicator ‘business climate in industry’ decreases by 1.3 percentage points compared to September  as a result of more moderate industrial entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months .

The inquiry registers an improvement in their opinions for the production assurance with orders over the last 3 months, which is not accompanied by increased expectations about the production activity over the next 3 months. The average capacity utilization from July to October increases by 2.4 percentage points and it reaches 72.8%, as regards the expected demand over the next months a surplus of capacity is foreseen.

The main factors limiting the enterprises continue to be connected with the uncertain economic environment, insufficient foreign demand and insufficient domestic demand.

As regards the selling prices in industry, the managers’ expectations are for them to preserve 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. The present construction activity is assessed as slight improved and their expectations about the activity over the next 3 months are favourable. In the last month the inquiry also reports a decrease in the number of clients with delay in payments. The uncertain economic environment remains the main obstacle for the business development, followed by the shortage of labour and competition in the sector.

Concerning the selling prices, the construction entrepreneurs’ foresee 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 as a result of the optimistic retailers’ expectations about the business situation of the enterprises over the next 6 months. Their forecasts about both the volume of sales and the orders placed with suppliers over the next 3 months are also improved. The uncertain economic environment continues to be the main factor, limiting the activity. An increase of the negative influence of the factor ‘insufficient demand’ is also registered, which shifts to the third place the difficulties, connected with the competition in the sector.

The retailers expect the selling prices to preserve their level over the next 3 months.

Service sector.

In October, the composite indicator ‘business climate in service sector’ increases by 3.4 percentage points which is due to the favourable managers’ assessments and expectations about the business situation of the enterprises. At the same time, certain improvement of their expectations as regards the demand for services over the next 3 months  is observed, but it is not accompanied by additional hiring of personnel.

The most serious difficulties for the business remain the uncertain economic environment, insufficient demand, factor ‘others’ and competition in the sector.

Concerning the selling prices in the service sector, the managers foresee them to remain unchanged over the next 3 months.