Bulgaria's business sentiment edges up in March

A decline in the business climate was recorded in the industry and construction sectors, offset by more optimistic sentiments in retail trade and services, the National Statistical Institute (NSI) said in a monthly survey.

The business climate indicator in industry fell by 0.5 pp on the back of managers’ unfavourable assessments of the current business situation. They observed an increase in the production assurance with orders in the last month, but it is not accompanied by improved expectations about the production activity over the next three months.

The composite indicator in construction lost 1.7 pp from its February level as a result of reserved assessments and expectations by construction entrepreneurs about the business situation. Their views on the present and expected construction activity are also more moderate.

The main challenges for construction businesses remain the uncertain economic environment, labour shortage and costs for materials. At the same time, the negative impact of competition in the branch has grown in the last month.

In comparison, the business sentiment indicator in retail trade grew by 1.2 pp, reflecting retailers’ positive assessments and expectations about the business situation. Their forecasts about sales volume and orders placed with suppliers over the next three months are also more favourable.

Retailers project selling prices to keep their level over the next three months.

Finally, the composite indicator in services, excluding trade, added 3.6 pp, driven by the improved expectations of managers about the business situation over the next half year. Additionally, their projections about service demand over the next three months are optimistic.