In April the economic conjuncture in the industry remained favorable. The composite business climate indicator declined by 2.4 percentage points in comparison with the previous month, but still has managed to maintain an extremely high level for more than 20 months. The assessments about the present production activity were also more optimistic compared to March, and the expectations for the next 3 months showed that it would retain the same level (according to 57.8% of the enterprises) or would increase (according to 38.8%).
For the period January - April 2008 industry's surplus capacity decreased and the average capacity utilization was assessed at 75.7%. The figure represented an increase of 0.7 percentage points compared to January. There was certain deterioration in the competitive position of enterprises both on domestic and foreign market in the last three months, according to managers.
The uncertain economic environment and the insufficient domestic demand remained the main problems for the enterprises in the sector. The shortage of labor was also pointed out by more than one fifth of the enterprises in April as a problem.
As regards to the selling prices, most industrial enterprises (79.2%) expect them to remain unchanged, whereas 20.1% forecast an increase over the next 3 months.
The high expectations about the business situation in construction enterprises over the next 6 months raised in April the composite indicator of business climate in construction by 2.7 percentage points, 2 percentage points below the long-term average. The entrepreneurs’ forecasts about the activity and personnel in the sector over the next 3 months were also optimistic. In the period from January to April the assessments about the production assurance with orders (measured in months) have improved, too - from 5.9 to 6.1, as the enterprises expected an inflow of new orders over the next 6 months.
The competition, the uncertain economic environment and the labor shortage continued to be the main factors limiting the activity in the sector continued in April. The negative influence of the material prices also increased.
The business inquires conducted by the NSI in the last six months registered a relatively steady share of construction enterprises (over one third) with intentions of hiking selling prices in the sector.
The composite indicator of business climate in retail trade remained unchanged in April. Managers' assessments about the present business situation of retail trade enterprises were positive and their expectations for the next 6 months were that it would remain unchanged (according to 63.1% of the enterprises) or improve (according to 35.1%). At the same time retailers did not foresee reduction both in the volume of sales and orders placed with suppliers over the next 3 months.
The insufficient demand, the competition in the branch and the uncertain economic environment continued to be the main factors limiting the activity in the branch. In April as compared to the previous month an increase of the relative share of enterprises with financial problems (from 6.8 to 12.1%) was observed.
The retailers have been having high expectations concerning the selling prices since June 2007. For the last month the share of managers that expected a price hike stood at 34.9%
The more optimistic assessments and expectations about the business situations in enterprises of service sector in April raised the level of the composite indicator of business climate by 4.9 percentage points compared to March. At the same time the managers forecast an increase in the demand for services and additional hiring of labor force over the next 3 months.
The most serious problem limiting the activity of enterprises were the competition in the branch and the uncertain economic environment, pointed out by 59.7 and 20.8% of entrepreneurs, respectively. As regards to selling prices, the expectations of two thirds of the enterprises were for them to remain unchanged over the next 3 months.