BUSINESS CLIMATE DOWN AFTER FIVE MONTHS OF IMPROVEMENT

Following 5 consecutive months of improvement, business climate in Bulgaria registered a drastic downturn in March compared to February, according to data of the National Statistical Institute.
The statistics reported that in March the Bulgarian economic situation experienced a change for the negative and the total index decreased by 4.1 points compared to its February level. The most significant decline was observed in the service sector, where in March the business climate indicator fell sharply by 14.9 ppts month-on-month.

According to experts, the fall down can be associated to the unfavourable expectations of managers about the conditions of their facilities. Opinions on the current and anticipated demand for services are also deteriorating. With respect to staff, however, a certain improvement in forecasts is observed for the next three months, points out the NSI.
The unstable and uncertain economic environment and competition within the industry are the main factors that halt development. As for the sell prices in the sector, expectation are that these would remain unchanged within the next three months.

Business climate in relation to the industrial sector has also deteriorated: in March, the index slumped by 3.9 points. The main reasons are the worsened expectations of managers for the coming six months. The last survey also recorded shrinking expectations for positive growth of business activities, explained the NSI experts. With respect to staff, possibilities for lay-offs are still present.

Managers in the construction industry also changed their expectations in March and the business climate indicator fell by 1.7 points month-on-month. In their opinion, there is some positive growth in order placement in the production sector and the expectations for the coming months were also favorable.