Bulgaria's Business Climate Up 1.4% July 2013

In July 2013 the total business climate indicator in Bulgaria has increased by 1.4 percentage points compared to its level from the previous month due to the improved business climate in industry and retail trade.

The data was released Monday by the country's National Statistical Institute, NSI.

The composite indicator "business climate in industry" increased by 3.2 percentage points in comparison with June, which is due to the more favorable managers' assessments and expectations about the business situation of the enterprises. In their opinion the present production activity is improved, but their prognoses for the next 3 months are more reserved.

The average capacity utilization in July increased by 1.5 percentage points compared to April and it reached 69.5% as the enterprises report a surplus of capacity with regard to the expected demand over the next months.

The uncertain economic environment and insufficient domestic demand continue to be the main factors limiting the business development in the branch as in the last month a strengthening of their unfavorable influence is observed.

Regards sale prices, the expectations of the majority of the managers are that they will remain unchanged over the next 3 months.

In July 2013, the composite indicator "business climate in construction" decreased by 1.8 percentage points due to the worsening construction entrepreneurs' expectations about the business situation of the enterprises over the next 6 months.

According to their assessments, the present construction activity in comparison with the previous month has decreased and their expectations for the next 3 months are more reserved.

In July 2013, the level of production certainty due to orders is preserved and it is assessed to be 4.9-month-long on average. At the same time, managers' expectations about new orders over the next 6 months are more unfavorable.

The uncertain economic environment remains the main factor limiting the activity in the branch, followed by financial problems and insufficient demand. Concerning the sale prices in construction, the expectations are for preservation of their level over the next 3 months.

In retail trade, the composite indicator "business climate in retail trade" increases by 5.2 percentage points in comparison with the previous month, which is attributed to the improved retailers' assessments and expectations about the business situation of the enterprises.

However, their forecasts about sales and orders placed with suppliers over the next 3 months are more reserved.

The main obstacle for business development in the branch continues to be the uncertain economic environment.

In the last month, the study registers strengthening of the negative impact of the factor "competition in the branch" by 3.0 percentage points which moves the "demand" factor to third place.

The managers' expectations about sale prices in retail trade are they to remain unchanged over the next 3 months.

In July 2013, the composite indicator "business climate in the service sector" decreased by 2.8 percentage points, compared to June, due to the more unfavorable managers' assessments and expectations about the business situation of the enterprises.

However, their opinions regarding present and expected demand for services have improved.

The most serious factor, limiting the activity of the enterprises, continues to be the uncertain economic environment, whose negative influence strengthened in the last month.

"Competition in the branch" and "insufficient demand" take the second and third place.

Concerning the sale prices in the service sector, the managers' expectations are for preservation of their level over the next 3 months.

Adapted from Novinite