BULGARIAN ENTREPRENEURS SAW AN IMPROVED BUSINESS CLIMATE IN JULY
The economic situation has improved by 1.1 percentage points compared to previous month June, National Statistical Institute reported
In July 2012 the total business climate indicator increases by 1.1 percentage points compared to its level from the previous month as improvement is registered in industry, construction and retail trade, while in service sector – deterioration, shows the data of the National Statistical Institute.
In July the composite indicator "business climate in industry" increases by 1.9 percentage points (Figure 2) mainly due to elevated optimistic managers' expectations about the business situation of the enterprises over the next 6 months (Figure 3). The inquiry registers an increase of the production assurance with orders (from domestic market and from abroad) as the forecasts as regards the production activity over the next 3 months are also more favourable.
The average capacity utilization in July 2012 increases by 1.4 percentage points in comparison with April and it reaches 71.3% (Figure 4). The enterprises report a surplus of capacity with regard to the expected demand over the next months.
The main problems for the business development in the branch remain the uncertain economic environment and the insufficient domestic demand.
As regard to the selling prices the managers continue to expect an increase over the next 3 months.
In July 2012 the composite indicator "business climate in construction" increases by 1.6 percentage points which is due to the more optimistic construction entrepreneurs' assessments about the present business situation of the enterprises. In their opinion the present construction activity is improved, as their forecasts for the next 3 months remain favourable but more reserved compared to June.
The production is assured with contracts for 5.5 months, as a decrease of 0.5 months compared to the assessment from April is registered. At the same time the expectations about new orders over the next 6 months are more unfavourable.
The uncertain economic environment and the financial problems remain the main factors limiting the activity of the enterprises in the branch. In July compared to the previous month the negative impact of the factor "competition in the branch" is strengthen (by 7.3 percentage points).
Concerning selling prices in the branch the entrepreneurs' expectations are for preserving of their level over the next 3 months.
The composite indicator "business climate in retail trade" increases by 1.4 percentage points due to the improved manager's assessments and expectations about the business situation of the enterprises. Increased optimism in their expectation as regard to the sales and orders placed with suppliers in the next 3 months is observed.
The uncertain economic environment continues to be one of the major factors limiting the activity of the enterprises in the branch although in July its negative influence decreases compared to the previous month.
However the negative influence of the factor "demand" increases (by 6.0 percentage points) making the competition in the branch the third strongest factor.
As regard to the selling prices the retailer's expectations are in direction of an increase over the next 3 months.
In July the composite indicator "business climate in service sector" decreases by 1.5 percentage points in comparison with the previous month (Figure 17) which is due to the more moderate managers' assessments and expectations about the business situation of the enterprises. As regard to the demand for services the present tendency is estimated as improved but the inquiry registers certain pessimism in the expectations for the next 3 months.
The uncertain economic environment and the competition in the branch remain the major factors limiting the development of the business in the branch. The prevailing manager's expectations regarding the selling prices are for preservation of their level over the next 3 months.
