NSI: The Business Climate Continues to Improve

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NSI: The Business Climate Continues to Improve

In March 2008 the economic conjuncture in the country remained favorable. The total business climate indicator rose for a third consecutive month to 0.5 percentage points above the February level, the National Statistics Institute (NSI) informs.

Industry. In March the composite business climate indicator in industry rose by 1.5 percentage points. It is yet 3.1 percentage points below the long-term maximum for the last 10 years.

At the same time, managers' assessments of the present production activity are more moderate compared to those expressed in February. The stocks of finished goods increased in the last month and the production assurance with orders fell slightly as result of the lower domestic demand.

The uncertainty in the economic environment and the insufficient domestic demand remain the main problems for the enterprises in the branch. The negative influence of the factor “weakness in economic laws” also increased. The factor “shortage of labor force” was also higher, it was mentioned by 19.3% of enterprises.

Construction. In March the composite business climate indicator in construction did not change. Managers described the present economic conjuncture in the sector as more favorable. As to their prognoses for the next 6 months opinions slightly shift from most optimistic to more moderate.

The construction activity was higher compared to February and the prognosis for the next three months are for it to remain higher. Expectations about employment opportunities in the branch are also more optimistic.

The main reasons limiting the activity the sector are the competition in the branch, the uncertainty in economic environment and the shortage of labor force.

Managers expect selling prices to be on the rise in the next three months.

Retail trade. In March 2008 the composite indicator of business climate in retail trade remained unchanged from previous month. Managers' assessments were positive. 61.9% of managers expect the situation to remain favorable and 36.4% say it is likely to improve. Volumes of sales and orders are not likely to change, according to forecasts.

The main factors limiting the activity in the branch continue to be insufficient demand and competition.

More than one third of managers in retail trade expect selling prices to rise. This has been a tendency since August 2007.

Service sector. The composite indicator “business climate in service sector” kept its comparatively high level (48.2%) in March 2008, although it decreased slightly (by 0.4 percentage points) compared to February. The manager’s assessments about the present business situation and their forecasts about its development over the next 6 months remained favorable.

Competition continues to be the most serious factor limiting the activity (according to 60.4% of the managers).

Managers do not expect selling prices to rise in the following three months.

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