Data of business tendency surveys¹, which were submitted by the enterprises until February 21 and carried out by the Central Statistical Bureau (CSB), show that in February 2022, business confidence indicators were positive in retail trade, manufacturing and services sector, while in construction, although improving, business confidence indicators were still negative.

Business confidence indicators characterize general situation in the sector and they are acquired by carrying out business surveys in industry, construction, retail trade and services sector. If the indicator is above zero, business environment is positive, if it is below zero – business environment is negative.

Environment is improving in almost all sub-sectors of retail trade

In February 2022 confidence indicator in retail sale has increased to 4.3. As compared to January, this indicator has improved by 3 percentage points. As compared to the previous month, business environment is improving in almost all sub-sectors of retail trade. The most optimistic were entrepreneurs in trade of motor vehicles and parts thereof, maintenance and repair of motor vehicles, where confidence indicators in February were 11.1 and 6.5, respectively. Business environment in retail trade of food and of non-food products does not differ (-3.9), however, in retail trade of food products, as compared to January, the most rapid improvement of business environment was registered (by 8.6 percentage points). In turn, the lowest confidence indicator in February was in retail sale of fuel (-13.2), and this is the only sub-sector of retail trade where, as compared to January, business environment has worsened.

The share of retail sale enterprises feeling no factors restricting their economic activity comprised 16 % in February. Since October last year this indicator has remained rather stable – between 14 and 16 %. In February the number of retail sellers mentioning lack of demand as a restrictive factor has increased significantly (33 %). Activity of a significant part of retail sellers (35 %) is also restricted by competition in trade sub-sector. Impact of COVID-19 as a significant factor restricting economic activity was mentioned by 37 % of respondents, and since November this share is reducing each month. In February, respondents also mentioned rising energy prices as constraints to economic activity, which increases the costs. In sale of motor vehicles problems with availability and delivery of goods (motor vehicles and parts thereof) for sale were mentioned.

Business environment in postal and courier activities sector is worsening rapidly

Also in the services sector, the seasonally adjusted confidence indicator in February 2022 is positive (6.4) and business environment of entrepreneurs has improved by 2.1 percentage point compared to January. As usual, indicators of environment differ significantly in various services sectors, and also trend of their changes differ depending on the specificities of the sector, seasonal impact and to what extent Covid-19 pandemic affects the sector. In February, the most optimistic were entrepreneurs in insurance (40.7), legal and accounting (16.7) sector, as well as in computer programming (24.4). Entrepreneurs in accommodation and catering (- 24.9) and security and investigation services (-19.0) had the lowest business confidence indicators in February. Unexpectedly low confidence indicator in February was in postal and courier activities sector (- 22.2), which, compared to January, has fallen by 38.9 percentage points. When analysing components of confidence indicator in this sector, it is obvious that worsening of environment is mostly affected by the expected decline in demand for their services in the next 3 months. In February environment in general was positive in 17, but negative – in 12 services sub-sectors. In one sector (water transport) confidence indicator was equal to zero.

In February, 35 % of respondents of services sector have not felt any factor restricting economic activity. Compared to January, their share has increased by 2 percentage points. The share of respondents indicating that consequences caused by Covid-19 is a significant factor restricting successful economic activity has dropped to 20 %. In turn, activity of 26 % of entrepreneurs of services sector is significantly restricted by insufficient demand, but of 23 % – by lack of labour force.

Environment of builders continues to improve

In February confidence indicator in construction, according to seasonally adjusted data, is -3.3 which, compared to the previous month, has risen by 2.3 percentage points. In February, compared to January, assessment of entrepreneurs regarding level of construction orders slightly improved, as well as assessment regarding expected development of employment in the next three months was optimistic. Confidence indicator rose in all construction sectors – construction of buildings, civil engineering and specialized construction activities.

In February construction sector was mostly affected by bad weather (indicated by 46 % of respondents, which is 8 percentage points less than in February last year). The second most often factor restricting activity of entrepreneurs indicated still is insufficient demand (indicated by 29 % of entrepreneurs surveyed), which, as compared to the previous month, reduced by 2 percentage points. In turn, share of enterprises whose economic activity was restricted by lack of labour force (27 % of respondents) has risen by 2 percentage points. Negative impact of Covid-19 in February was mentioned by 9 % of enterprises, which is 2 percentage points more than in January. In February, economic activity of 16 % of construction enterprises surveyed was not affected by any restrictive factor (increase of 2 percentage points, as compared to February last year).

After a break of three months environment in manufacturing is positive again

In February, compared to January, confidence indicator in manufacturing has improved by 2.9 percentage points and comprises 1.9. It was affected by optimistic forecasts of enterprise managers regarding their production activity for the next three months (rise in the expected production activity, increase in economic activity), as well as decrease in the level of stocks of finished products. The largest increase of confidence indicator, as compared to the previous month, was in such manufacturing sectors as manufacture of wood and of products of wood and cork, manufacture of beverages, manufacture of electrical equipment, manufacture of non-metallic mineral products, as well as manufacture of machinery and equipment n.e.c. In turn, there was a drop in manufacture of textiles, manufacture of motor vehicles, trailers and semi-trailers, manufacture of paper and paper products, manufacture of computer, electronic and optical products and repair and installation of machinery and equipment.

As compared to January, there was a slight drop in the number of respondents, which indicated insufficient demand and lack of materials or equipment as a factor restricting economic activity (indicated by 27 % and 16 % of enterprises surveyed, respectively). In turn, impact of lack of labour force and financial difficulties has increased (indicated by 30 % and 10 % of respondents, respectively). In February, 9 % of enterprises surveyed indicated impact of Covid-19 (compared to the previous month, reduction of one percentage point). As other factors restricting production rise in prices of energy resources and raw materials was mentioned. In February, economic activity of 28 % of manufacturing enterprises surveyed was not affected by any restrictive factor.

In February 2022 economic sentiment indicator comprised 102.5³, (99.3 – in the previous month). Economic sentiment indicator characterizes general socio-economic situation in the country during a certain period of time (month), and it is calculated by the European Commission, Directorate-General for Economic and Financial Affairs for all EU countries according to a common methodology, taking 15 various seasonally adjusted components included in industry, construction, retail trade and services sector, as well as in consumer confidence indicator, as a basis.

¹Business surveys in industry, construction, retail trade and services sector are carried out by the CSB monthly, accordingly methodology of the Joint Harmonised EU Programme of Business and Consumer Surveys co-financed by the European Commission.

²Net (balance) is calculated as difference between positive and negative answers of entrepreneurs surveyed, which are expressed in per cent.

³Value of the indicator exceeding 100 means that numeric characteristic of the economic situation exceeds long-term average value (2000–2021). While value of the indicator smaller than 100 means that characteristic of economic situation is below long-term average value.

Media requests:
Communication Section
E-mail: media@csp.gov.lv
Phone: +371 27880666

More information on data:
Ieva Vanaga
Trade and Services Statistics Section
E-mail: Ieva.Vanaga@csp.gov.lv
Phone: +371 67366738

Madara Liepiņa-Dūdele
Industrial and Construction Statistics Section
E-mail: Madara.Liepina@csp.gov.lv
Phone: +371 67366953

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