March business climate improves in construction, worsens in industry, retail trade and services
In March 2023, the total business climate indicator remained at its February level. A decrease was registered in industry, retail trade, and services, while a rise was observed in the construction sector, the National Statistical Institute said.
In industry, the composite business climate indicator dropped by 0.8 percentage points, which is due to the worsened industrial entrepreneurs’ expectations about the business situation of enterprises in the next six months. At the same time, their forecasts about the production activity over the next three months are moderate. The insecure economic environment and the workforce shortage remain the most serious obstacles to enterprises’ activity, despite the drop in their negative impact in the last month. Fourteen per cent of managers expect the sale prices in industry to go up in the next three months.
In construction, the composite business climate indicator grew by 4.0 percentage points as a result of construction entrepreneurs’ improved assessments and expectations about the present business situation of enterprises. New orders have increased over the past month, and the expectations about the activity over the next three months remain optimistic. A total of 74.7% of enterprises have marked the insecure economic environment as the main factor limiting the businesses’ development, followed by the prices of materials and the workforce shortage. Just over 31 per cent of managers expect sale prices in construction to continue increasing in the next three months.
In retail trade, the composite business climate indicator dropped by 1.3 percentage points due to a normal seasonal shift from “good” to “satisfactory” of retail traders’ assessments and expectations about the business situation of enterprises. At the same time, their opinions on the volume of sales in the next three months, as well as their expectations for that period are positive. Retail traders consider the insecure economic environment as the main obstacle to their activity, followed by competition in the branch and insufficient demand. Compared to February 2023, March saw an increase in the share of retail traders expecting sale prices to grow in the next three months.
In the services sector, the composite business climate indicator decreased by 1.2 percentage points as a result of managers’ more unfavourable assessments about the current state of enterprises. Their opinions on the current demand for services are more reserved, while their expectations for the next three months are improving. The most serious problems for the business’ development continue to be the insecure economic environment, the competition in the branch, and the workforce shortage, but their negative impact has decreased in the past month. A total of 15.5% of managers expect sale prices in the services sector to go up in the next three months.