site.btaGeneral Business Climate Index Goes Up by 1.7 pp in December, Only Construction Shows Decrease

Bulgaria's general business climate index rose by 1.7 percentage points, from 17% in November 2024 to 18.7% in December 2024. The increase resulted from upward changes in industry, retail trade and services. The only decrease was reported in construction, the National Statistical Institute reported on Monday.

The index component which describes the business climate in industry grew by 1.9 pp, from 15.8% in November 2024 to 17.7% in December 2024. This was due to industrialists' higher expectations of the business condition of their enterprises in the next six months. They also report a slight increase in supply orders in December. This, however, does not go with higher expectations of manufacturing activity in the next three months. Uncertainties about the economic environment and labour shortage remain the main hurdles to industrial development, with December witnessing a more pronounced negative impact of economic insecurity. Industrialists forecast a rise in selling prices in the next three months.

The index component describing the business climate in the construction sector fell by 3.5 pp, from 20.4% in November to 16.9% in December, due to more moderate assessments and expectations by construction entrepreneurs about the business condition of their companies. Businesspeople in the sector also have reservations about construction activity in the next three months. As before, the main issue in the construction sector has to do with uncertainties in the economic environment, named by 58.9% of respondents in the monthly polls. The second and third most serious issues are labour shortage and input costs. Most construction entrepreneurs expect selling prices to remain unchanged in the next three months.

The index component showing the business climate in the retail sector went up by 5.7 pp, from 23.7% in November to 29.4% in December, as a result of entrepreneurs' positive assessments and optimistic expectations of the business condition of their companies. Their assessments of sales volumes over the last three months and their expectations in this regard for the next three months have improved as well. Retailers continue to identify uncertainties in the business environment, competition in the sector and low market demand as the main constraints to their business development.

The index component showing the business climate in the services sector went up by 2.4 pp, from 9.5% in November to 11.9% in December, thanks to businesspeople's positive assessments and optimistic expectations about the condition of their enterprises. Their opinions about current and future demand for services have become more moderate, however. Uncertainties about the economic environment remain the most serious impediment to business activities in the sector of services. Competition in the sector has increased its weight as a negative factor, leaving labour shortage in third place. Most of the sector's entrepreneurs expect selling prices to remain unchanged in the next three months.