July Bulgarian Business Climate Improves in Industry and Retail, Worsens in Construction

Jerusalem, 28 July, 2022 (TPS) -- The general indicator of the business climate in July 2022 remained roughly unchanged at its level from the previous month. An increase in the indicator was observed in industry and retail trade, in the service sector it maintained its level from June, and in construction, a decrease was registered, according to data from the National Statistical Institute released on Thursday.

The composite indicator “business climate in industry” increased by 2.1 points, which is due to the more favorable assessments and expectations of industrial entrepreneurs about the business condition of enterprises. Their forecasts regarding exports and production activity in the next three months were also positive. The average capacity in July is 0.8 points below the level of April and reached 75.5%, and in view of the expected demand in the coming months, a shortage of capacities is expected.

The main difficulties for enterprises continued to be related to the uncertain economic environment and the labor shortage. Managers’ expectations regarding sales prices in industry in the next three months were leaning towards an increase.

In July, the composite indicator “business climate in construction” decreased by 2.9 points as a result of the deteriorated expectations of construction entrepreneurs about the business condition of enterprises in the next six months. In their opinion, a decrease in new orders is expected in the next six months, which would also lead to a certain decrease in activity in the short term.

The uncertain economic environment, the prices of materials and the labor shortage continued to limit the development of businesses to the greatest extent, and in the last month there was an increase in their negative influence. Regarding sales prices in construction, 49.3% of managers predicted an increase in the next three months.

The composite indicator “business climate in retail trade” increased by 0.7 points, due to the more optimistic expectations of retailers about the business condition of enterprises in the next six months. At the same time, however, their forecasts regarding the volume of sales and orders to suppliers in the next three months were more reserved.

In July, the composite indicator “business climate in the service sector” remained approximately at its June level. Managers’ assessments of the current demand for services were favorable, while their expectations for the next three months shifted to more moderate views. The most significant difficulties for business development continued to be related to the uncertain economic environment, competition and the labor shortage. Regarding selling prices in the service sector, 21.8% of managers predicted that they will increase in the next three months.