site.btaBulgaria's Business Climate Deteriorates in December

In December 2023, the total business climate indicator decreased by 1.8 percentage points (pps) to 19.8% from 21.6% in November due to the unfavourable business climate in construction, retail trade and services, the National Statistical Institute said on Friday.

Industry

At 20.7%, the business climate in industry composite indicator stayed close to its November level of 20.6%. Industrial entrepreneurs assessed the current production activity as favourable, while their expectations for the next three months were slightly worse. The uncertain economic environment and a shortage of labour remained the most serious obstacles to business development.

Construction

In December, the business climate in construction composite indicator decreased by 1.2 pps to 22.4% from 23.6% in November due to the entrepreneurs' reserved assessments of the current business situation of the enterprises. However, their expectations for the business situation of the enterprises in the next six months and construction activity in the next three months are improved. As before, the main difficulties are the uncertain economic environment, the cost of materials and a shortage of labour. Compared to November, however, the negative impact of the first and third factors decreased.

Retail trade

The business climate in retail trade composite indicator dropped by 5.6 pps, from 27.5% in November to 21.9% in December as a result of a shift in the retailers' assessments and expectations for the business situation of enterprises from 'good' to 'unchanged'. Their forecasts for sales volumes and orders placed with suppliers for the next three months were also reserved. The uncertain economic environment and competition still were the most serious problems for business development.

Service sector

The composite indicator for the business climate in the service sector decreased by 2.5 pps, from 15.9% in November to 13.4% in December due to the managers' unfavourable assessments and expectations for the business situation of the enterprises. However, their expectations for demand in the next three months improved slightly. The main factors limiting the enterprises' activity were the uncertain economic environment, competition and a shortage of labour.