BULGARIA’S TOTAL BUSINESS CLIMATE INDICATOR DOWN 1.6 PP IN AUGUST

In August 2014 the total business climate indicator has decreases by 1.6 percentage points compared to its July level which is due to the more unfavourable business climate in construction, retail trade and service sector, shows a recent report of Bulgaria’s National Statistical Institute (NSI).

Industry. The composite indicator “business climate in industry” remains approximately its level from the previous month. The inquiry registers certain improvement of the production assurance with orders from abroad, which is not accompanied by increased expectations about the activity of the enterprises over the next 3 months.

The main obstacles for the business development in the branch remain the uncertain economic environment and insufficient domestic demand pointed out respectively by 58.3% and 30.7% of the industrial entrepreneurs.

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

Construction. In August the composite indicator “business climate in construction” decreases by 2.2 percentage points due to the more reserved construction entrepreneurs’ expectations about the business situation of the enterprises over the next 6 months. At the same time their expectations about the construction activity over the next 3 months are also more unfavourable.

The main factor limiting the activity in the branch continues to be the ncertain economic environment, followed by the competition in the branch and financial problems.

Concerning the selling prices in construction the prevailing 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 0.9 percentage points compared to the previous month which is due to the more unfavourable retailers’ assessments and expectations about the business situation of the enterprises.

Concerning the volume of sales and orders placed with suppliers their expectations over the next 3 months are also more reserved.

The most serious factor limiting the activity in the branch continues to be the uncertain economic environment, though in the last month a decrease of its negative influence is observed. In second and third place are the factors “insufficient demand” and “competition in the branch”.

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

Service sector. In August the composite indicator “business climate in service sector” drops by 5.3 percentage points mainly due to more moderate managers’ expectations about the business situation of the enterprises over the next 6 months. Their opinions as regards the present demand for services are more reserved as well in their expectations over the next 3 months certain pessimism is observed.

The uncertain economic environment and competition in the branch remain the main factors, pointed out by the enterprises as an obstacle for the business development in the branch.

Concerning the selling prices in the service sector the majority of the managers expect preservation of their level over next 3 months.