Bulgaria’s business confidence index fell by 1.8 percentage points in July compared to the prior month due to worsened expectations of managers in industry, retail trade and services sectors, official data showed on Tuesday.

The business confidence index in the industrial sector dropped by 2.9 points in July compared with June as managers said they expect the business climate to be more unfavourable during the next six months.

Expectations about exports and the capacity utilization rate also were more pessimistic mainly due to the uncertain economic environment and insufficient domestic demand, according to the surveyed entrepreneurs, the National Statistical Institute (NSI) said in a monthly survey of Bulgaria’s business climate.

The business climate in the retail trade sector deteriorated by 0.6 points in July compared to the previous month due to more moderate expectations about the business prospects of the companies in the sector. The managers’ expectations about the sales and orders to suppliers during the next three months, however, remain optimistic, albeit more reserved compared to June.

The index in the services sector posted a drop  of 3.6 percentage points as managers’s expectations about the state of their business during the next six months shifted to ‘unchanged’ from ‘improving’

The business confidence index in the construction sector was the only component of the aggregate indicator to increase in July, rising by 0.6 percentage points as activity in the sector picked up compared to June. The sector’s order book is full for the next 5.2 months. The uncertain economic environment, increased competition in the sector and insufficient demand remain the factors that constrain activity, according to the NSI survey.