Companies experience deterioration in business climate

The general business climate indicator in Bulgaria has dropped by 3.7 percentage points, data from the National Statistical Institute show. The main reason is the expectations of the business that a large part of the future orders will not be realized due to the international emergency related to the spread of the coronavirus.

The only industry that has seen an increase in business climate is construction. The growth there was 1.4 percentage points in March compared to February. According to the industry data, there are new orders in the last month and they are expected to continue in the next period.

However, industrial enterprises report decline in the business climate at 5.4 percentage points. In addition to the difficult execution of orders, companies in the sector expect loss of workers, as well as strengthening of the "uncertain economic environment" factor.

Work force shortage remains among the major problems of managers. More than half of them define it as the leading one for the deterioration of the business climate in Bulgaria. Among other negative factors, companies point to uncertainty and competition.

The largest drop in the business climate indicator was observed in retail trade - by 6.6 percentage points. Traders have reservations about both deliveries and future sales. Competition in the sector continues to be a major problem for business development. There has also been an increase in the negative impact of the "uncertain economic environment" factor, which shifts in third place the difficulties associated with insufficient demand. Traders do not expect a change in the sale prices of most goods.

In the services sector, the decline in business climate is by 3.1 percentage points.