Bulgaria: More unfavourable business conjuncture in industry, construction and retail trade, May 2022

In May 2022, the total business climate indicator decreases by 0.7 percentage points in comparison with April as a result of the more unfavourable business climate in industry, construction and retail trade, the National Statistical Institute said.

Industry.

The composite indicator “business climate in industry” decreases by 0.8 percentage points, which is due to the worsened industrial entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. According to them, in the last month there has been a certain increase of the production assurance with orders, but that is not accompanied by increased expectations about the production activity over the next 3 months.
The main factor limiting the activity is the uncertain economic environment, pointed out by 61.7% of the enterprises. In the second and the third place remain the shortage of labour and factor “others”. According to the last inquiry, the managers’ share who continue to expect the selling prices in the sector to increase over the next 3 months is 35.3%.

Construction.

In May, the composite indicator “business climate in construction” drops by 3.6 percentage points as a result of the more unfavourable construction entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. Their opinions about the new orders inflow over the last month are also negative, which is accompanied with more pessimistic expectations about the construction activity over the next 3 months.

The uncertain economic environment, costs of materials and shortage of labour continue to be the main difficulties for the business development, as in May a decrease in the negative impact of the second and third factors is observed.

Concerning the selling prices in construction, the managers’ expectations are for them to increase over the next 3 months.

Retail trade.

The composite indicator “business climate in retail trade” decreases by 2.2 percentage points, which is due to the reserved retailers’ expectations about the business situation of the enterprises over the next 6 months. At the same time, their expectations about the volume of sales and orders placed with suppliers over the next 3 months are unfavourable.

 The most serious obstacle for the activity of the enterprises remains the uncertain economic environment, followed by the competition in the branch and insufficient demand. The retailers’ forecasts about the selling prices over the next 3 months are in a direction of an increase.

Services sector.

In May, the composite indicator “business climate in services sector” increases by 4.3 percentage points as a result of the more favourable managers’ assessments and expectations about the business situation of the enterprises. Their opinions about the present and expected demand for services are also positive.

The uncertain economic environment, competition in the branch and the factor “others” continue to limit with most extent the business development, as in the last month strengthening of the negative influence of the factor ‘shortage of labour’ is observed.

In comparison with April, the managers’ share who expect the selling prices in the services sector to increase over the next 3 months is raising and reaches 31.4%