Bulgaria's Business Climate Up 0.7% in July 2011

Bulgaria's Business Climate Up 0.7% in July 2011

In July 2011, the total business climate indicator In Bulgaria increases by 0.7%, compared to its level from the previous month, the National Statistical Institute, NSI, has informed Thursday.

Improvement is observed in the industry, construction and retail trade sectors, while in the service sector there is deterioration. The long-term average level of the indicator is by 9.9% higher.

The composite indicator "business climate in industry" increases by 1.1 percentage points compared to June. Regarding the current business situation of enterprises the assessment is more favorable and is only by 1.7 percentage points below its long-term average.

In July 2011 the inquiry recorded an increase of the average capacity utilization by 1.9 percentage points (to 72.0%) in comparison with April this year. For the same period the production activity of the enterprises also increased. Despite of some increase of orders from abroad, the total production assurance with orders keeps its level from the latest months. At the same time, enterprises report a surplus of capacity with regard to the expected demand over the next months.

The major problems for the business development in industry continue to be the uncertain economic environment and the insufficient demand, as the uncertain economic environment is still above the usual for the last 10 years average value.

The latest inquiry further registers a decrease of the expectations about an increase of the selling prices in industry over the next 3 months.

In July 2011 the composite indicator "business climate in construction" increased by 2.6%, mainly due to elevated optimistic expectations of construction entrepreneurs about the business situation over the next 6 months. In the next half year the managers expect higher inflow of new orders in construction, which, according to their opinions, will lead to some increase of short-term activity, but without expectations about additional hiring of personnel.

According to business inquiries data, there are signals for suspension of downward trend in construction activity. The present production assurance with orders rises from 5.3 months in April to 5.6 in July 2011 and reaches its long-term average level.

The uncertain economic environment and the financial difficulties continue to be the main negative factors in the branch. Although they still mark values above long-term average levels their negative influence is significantly diminished in the last 4 months at the expense of the competition problem increment. With regard to the selling prices in construction there are weak expectations about an increase over the next 3 months. (Source: Sofia News Agency)

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