[size=75:11h721wp]novinite 28 December 2009

Bulgarian December Business Outlook Continues Negative Trend

Bulgarian business managers have made a pessimistic assessment of the present situation, and of their expectations for the next six months.

The combination of an uncertain economic environment and insufficient domestic and foreign demand are the most serious limiting factors, according to December data published by the Bulgarian National Statistical Institute (NSI) on Monday.

The "
Business Climate"
composite indicator registered a drop of 2,3% in December, when compared with the previous month.

The indicator is a standard means of comparison of performance across four sectors – industry;
construction;
the retail trade, and the service sector.

In the industrial sector, more than half the managers surveyed expected that selling prices would remain flat over the next three months. The specific sector registered a monthly drop of 1,3%. The level of expected orders for production remained almost unchanged from November, but present activity was down slightly for the period.

The construction industry is in a similar position, with managers reporting a small fall in the levels of activity and new orders. It is expected that the trend will continue over the next quarter, with the possibility of a corresponding increase in unemployment throughout the sector.

The fall in selling prices continued for the 13th consecutive month, as a majority of entrepreneurs and managers in the sector remain pessimistic, outnumbering the few who made a more positive assessment of price stability.

The retail trade indicator also fell for the month of December, decreasing by 3,2% when compared with November. The volume of sales fell, and expectations for sales growth in the next quarter are mainly negative.

However, the prospects of increased orders placed with suppliers are improved, resulting in a positive rise of 5,1% in the indicator.

The service sector reversed the rise registered in November, with the composite indicator down by 5,5% month-on-month. This was due mainly to more moderate expectations by managers in the sector, who have experienced a drop in activity, but who believe the situation will not worsen in the next three months.

As for prices within the service sector, there is an overall expectation that they will remain stable. However, the prediction is mixed, with a significant 16% still expecting a drop in prices.