site.btaBusiness Climate in Bulgaria Slightly Worsens in August 2023

After the business climate in Bulgaria maintained its level for two consecutive months, the overall indicator recorded a slight decrease in August, according to a report by the National Statistical Institute (NSI), published on Wednesday. The business climate in August decreased from 26.1% to 25.1% month on month. A less favourable business climate was observed in industry, retail trade and the services sector, while construction registered an increase.

The most significant decrease in the indicator in August was recorded in retail trade - from 36.9% to 34%, due to the unfavourable assessments and expectations of retailers about the business situation of enterprises. However, their forecasts for orders to suppliers from both the domestic and foreign markets over the next three months are improving.

The main factors constraining business development in the retail sector continue to be the uncertain economic environment and competition in the industry. The latest survey reports an increase in the negative impact of insufficient demand, which displaces the difficulties related to the shortage of labour in fourth place the scale. Compared to July, the share of retailers predicting selling prices to increase over the next three months is increasing.

Among the main difficulties for businesses reported by NSI in August continues to be the uncertain economic environment. The most serious obstacles to business development in industry continue to be the uncertain economic environment and labour shortages, with their negative impact intensifying in August. In addition to the above factors limiting the activity of construction companies, the problem of the price of materials continues to be relevant for them.

Managers in industry, construction and services anticipate price levels in their respective sectors to remain stable over the next three months.

In August, the composite indicator "business climate in industry" fell from 26.3% to 25.1% as a result of more reserved assessments and expectations of industrial entrepreneurs about the business situation of enterprises, the NSI said.

In August, the composite indicator "business climate in construction" increased from 23.1% to 24.7%, due to the optimistic assessments of construction entrepreneurs about the current business situation of their enterprises.

In August, the composite indicator "business climate in the services sector" decreased from 17.7% to 16.6%, due to managers' reserved assessments and expectations about the business situation of enterprises.