Bulgaria's Business Climate Worsens by 2.1% Nov 2011

Business | November 28, 2011, Monday // 12:45
Bulgaria's Business Climate Worsens by 2.1% November 2011: Bulgaria's Business Climate Worsens by 2.1% Nov 2011 Bulgarian national statistics data shows continuing lowering of business climat indicator percentage points. File photo

In November 2011, the total business climate indicator in Bulgaria marked again a decrease by 2,1%, in comparison with its level from the previous month.

The data was published Monday by the country's National Statistics Institute, NSI.

There is some noted improvement of the business climate only in retail trade, while in industry, construction and service sectors, business indicators have worsened.

The composite indicator "business climate in industry" decreased by 4.2%, compared to October, due to lowered expectations about business development over the next months. The prognoses in November about the business situation of enterprises and production activity are more reserved in comparison with the previous month.

With regard to current production activity, the balance indicator shows signs of deterioration as it has dropped by 10% over the last 3 months. The survey also registers some decline in optimism regarding orders from abroad. The uncertainty in economic environment is strengthened as in November nearly 59% of enterprises have pointed it out as a problem.

The prevailing expectations of industrial entrepreneurs with regard to the sale prices in the sector are still for preservation of their level over the next 3 months.

In November 2011, the composite indicator "business climate in construction" decreased again - by 2.5%, due to growing pessimism in the expectations of construction' entrepreneurs regarding the business situation over the next 6 months. The prognoses associated with the construction activity are also more unfavorable (the balance value of the indicator drops by 9.1%). At the same time, a further reduction of the personnel over the next months is expected.

In November, the survey registered reduced construction activity and lowered optimism about orders in comparison with the previous month. The main factor limiting the activity remains the uncertain economic environment - its negative influence increases and has reached over the last month its maximum value since the beginning of the construction survey – nearly 82%. At the same time, the last inquiry registers strengthening of the negative impact of the second-most limiting factor - "financial problems."

With regard to the sale prices in the sector, the expectations of construction entrepreneurs are for a decrease over the next 3 months.

The composite indicator "business climate in retail trade" in November reports an increase of 2.5% and exceeds its long-term average by 2.8%. At the same time, over the last month the survey registers a 6.4% decrease of the negative influence of the major factor limiting the business in the sector i.e. the uncertain economic environment, but at the expense of a forecasted increase of financial problems. Compared to the last month, the expectations of retailers regarding volume of sales and orders placed with suppliers over the next 3 months, although favorable, remain reserved.

Regarding retail prices, there are no expectations about an increase over the next 3 months.

In November 2011, the composite indicator "business climate in the service sector" decreases by 2.3%, in comparison with October. Over the last months, the assessments and expectations about both the business situation of enterprises and service demand have become more reserved. With regard to personnel, the prognoses are pessimistic – enterprises expect staff reduction over the next months.

The uncertain economic environment and the competition in the branch continue to be the most serious factors limiting the activity of enterprises in the service sector. In the managers' opinions, an increase of the sale prices over next 3 months is not expected.

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Tags: NSI, construction, retail trade, business climate, service sector, industry, managers, entrepreneurs, survey, indicators

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