In February 2014 the total business climate indicator preserves its level from the previous month

In February 2014 the total business climate indicator preserves its level from the previous month. The inquiries report an improvement of the indicator in industry and construction, and a decrease in retail trade and service sector.

Industry. The composite indicator “business climate in industry” increases by 1.5 percentage points in comparison with January due to the more optimistic managers’ assessments about the business situation of the enterprises. However, the present production activity is assessed as slightly decreased, while in the expectations about the activity in the branch over the next 3 months a certain improvement has been observed.

The most serious obstacles for the business development in the branch continue to be connected with the uncertain economic environment and insufficient domestic demand, pointed out respectively by 54.7% and 42.4% of the industrial entrepreneurs.

As regards the selling prices in industry, the managers expect them to remain unchanged over the next 3 months.

Construction. In February the composite indicator “business climate in construction” increases by 2.7 percentage points which is due to the improved construction entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. Their forecasts with regard to the construction activity over the next 3 months are also more favourable. The inquiry also reports a decrease in the number of the clients with delay in payments.

The main factor limiting the activity in the branch remains the uncertain economic environment, though in the last month a decrease of its negative influence is observed. In the second and third place are the factors “financial problems” and “competition in the branch”.

Concerning the selling prices in construction the managers’ expectations are for preservation of their level over the next 3 months.

Retail trade. The composite indicator “business climate in retail trade” decreases by 2.1 percentage points compared to the previous month  due to the worsening retailers’ expectations about the business situation of the enterprises over the next 6 months. However, their prognoses concerning the volume of sales and orders placed with suppliers over the next months are more favourable.

In February the inquiry reports strengthen of the negative impact of the factor “competition in the branch” (by 13.1 percentage points) which shifts the enterprises’ difficulties related to the uncertain economic environment and insufficient demand.

As regards the selling prices majority of the retailers foresee them to remain unchanged over the next 3 months.

Service sector. In February the composite indicator “business climate in service sector” decreases by 3.0 percentage points which is due to the more unfavourable managers’ assessments about the present business situation of the enterprises. With regard to the present demand for services their opinions are more reserved, while their expectations over the next 3 months are improved.

The uncertain economic environment and competition in the branch continue to be the main factors limiting the business development in the branch, as in the last month a decrease of their negative influence is observed.

Concerning the selling prices the managers forecast preservation of their level over the next 3 months.

Source: National Statistical Institute