Business Conjuncture, July 2020

In July 2020, the total business climate indicator increases by 2.5 percentage points compared to the previous month, show the data of the National Statistical Institute. An increase of the indicator is observed in retail trade and in service sector, in industry preserves its level from the June 2020, and in construction, a reduction is registered.

Industry

The composite indicator "business climate in industry’" remains its June level. In industrial entrepreneurs’ opinion, the present production activity is improved (the balance indicator increases by 6.8 percentage points), but their expectations about the activity over the next 3 months are more moderate. In July in comparison with April, an increase of the average capacity utilization (by 2.5 percentage points) is observed and which reached 70.4%. The most serious difficulties for the business remain the uncertain economic environment, followed by insufficient foreign demand and insufficient domestic demand. Concerning the selling prices the inquiry registers intentions for certain increase, although the prevailing of the managers expect them to remain unchanged over the next 3 months.

Construction

 In July the composite indicator “business climate in construction” decreases by 1.8 percentage points as a result of the worsened construction entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. Their forecasts about the construction activity over the next 3 months are also more reserved , as the inquiry also shows an increase of the number of clients with delay in payments. The uncertain economic environment, shortage of labour and the factor “others” continue to be the most serious obstacles for the activity in the sector, as in the last month the negative influence of the first factor strengthen. As regards the selling prices in construction, the managers expect preservation of their level over the next 3 months.

Retail trade

The composite indicator “business climate in retail trade” increases by 6.4 percentage points which is mainly due to the improved retailers’ assessments about the present business situation of the enterprises. Their expectations about the volume of sales and orders placed with suppliers over the next 3 months are also more favourable. The factors “uncertain economic environment”, “insufficient demand” and “competition in the branch” continue to limit with most extend the activity of the enterprises. The majority of the retailers expect the selling prices to remain unchanged over the next 3 months.

Service sector

In July, the composite indicator “business climate in service sector” increases by 8.2 percentage points as a result of the more positive managers’ assessments and expectations about the business situation of the enterprises. Concerning the demand for services, the present tendency is slightly improves, as their expectations over the next 3 months remain favourable although more reserved compared to the previous month. The uncertain economic environment continues to be the main obstacle for the activity of the enterprises, as in the last month strengthen of its negative impact is observed. In second and third place are the insufficient demand and the factor “others”. As regards the selling prices in the service sector, the prevailing managers’ expectations are for preservation of their level over the next 3 months.

Source: National Statistical Institute