Data of business tendency surveys¹ carried out by the Central Statistical Bureau (CSB) show that in March 2021 business confidence indicators improved in services sector and retail trade, as well as in industry and construction.

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.

Business environment has slightly improved in retail trade

According to seasonally adjusted data, in March confidence indicator in retail trade comprised -12.8. As compared to February, this indicator has grown by 6.6 percentage points. It was affected by a more positive forecasts of company managers regarding the expected activity of enterprises in the following three months. Confidence indicator increased in retail trade of food products, of non-food products and of fuel. Business environment has also improved in sale of motor vehicles, sale of motor vehicle parts and accessories, maintenance and repair of motor vehicles. However, confidence in all sectors mentioned still is negative. The lowest indicator (-30.6) is in retail sale of non-food products, but the most optimistic are retail trade enterprises of food products (-2.8).

In March 54 % of retail sale enterprises indicated that their economic activity is significantly restricted by impact of COVID-19. As compared to January and February, this indicator has not changed significantly. Also competition in trade sector (31 %) and insufficient demand (26 %) restricts successful activity of retail trade enterprises. In March, compared to February, share of enterprises in retail trade feeling no factors restricting economic activity continued has slightly increased. Their share comprised 15 %.

Business environment in services sector varies a lot

In services sector in March 2021, according to seasonally adjusted data, confidence comprised -18.7. As compared to February, this indicator has grown by 3.8 percentage points. Especially low confidence indicators still are in catering (-57.1 %), accommodation (-43.9 %), as well as in travel agency and tour operator sector (-42.2 %), but in transport by air, compared to February, business environment has improved. In March positive confidence values were in insurance sector (15.3 %), information services (1.5 %) and computer programming (1.4 %). In turn, compared to February, even though positive, confidence in postal and courier activities has decreased significantly (16.4 %).

In March, 26 % of respondents of services sector have not felt any factor restricting economic activity, but 36 % of respondents indicated that consequences from COVID-19 is a significant factor restricting successful economic activity. Also insufficient demand and financial difficulties was significant restrictive factor in services sector, which was indicated by 34 % and 15 % of entrepreneurs surveyed, respectively.

Confidence indicator in construction sector the lowest among all areas

In March this year confidence indicator in construction, according to seasonally adjusted data, was -21.1, which, compared to the previous month, has risen by 0.5 percentage point. It was affected by a more positive forecasts of company managers regarding the expected development of employment in the next three months, but more negative was assessment regarding level of construction orders. Confidence indicator increased in all construction sectors – construction of buildings, civil engineering and specialized construction activities.

In March construction sector still was mostly affected by bad weather conditions – it was mentioned as a factor restricting economic activity of enterprises by 48 %. In March 14 % of respondents indicated negative impact of COVID-19. In March the number of enterprises indicating lack of insufficient demand (38 % of construction enterprises surveyed), financial difficulties (10 %) and lack of labour force (9 %) as a restrictive factor has slightly increased. Share of enterprises in construction feeling no factors restricting economic activity continued to reduce (13 % of respondents).

Confidence indicator in manufacturing is the highest

In manufacturing confidence indicator in March comprised -5.6 (1.8 percentage points more than in February this year), which was affected by a slightly more positive assessment of current level of orders and optimistic forecasts of enterprise managers regarding activity of their enterprise in the next three months (the expected growth in production activity and economic activity). The largest increase of confidence indicator, as compared to the previous month, was in such manufacturing sectors as manufacture of textiles, manufacture of other transport equipment, manufacture of beverages and manufacture of machinery and equipment n.e.c. In turn, a drop was in manufacture of basic pharmaceutical products and pharmaceutical preparations, manufacture of rubber and plastic products, repair and installation of machinery and equipment. As compared to the previous months, business environment continues to improve regarding expected sale price of goods and development of employment in the following three months.

As compared to February, drop was observed in the number of enterprises indicating insufficient demand (35 % of respondents) and financial difficulties (11 % of enterprises) out of all factors restricting production. Slight increase was observed in the share of manufacturing enterprises having indicated lack of labour force and materials or equipment (indicated by 15 % and 14 % of enterprises, respectively). In March 19 % of respondents indicated impact of COVID-19. In March, economic activity of 26 % of manufacturing enterprises surveyed was not affected by any restrictive factor.

In March 2021 economic sentiment indicator comprised 90.7³, which is 2.2 points more than in February. 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 – 2020). 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@csb.gov.lv
Phone: +371 27880666

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

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

Business tendency

KEY INDICATORS

Confidence indicators

Economic sentiment indicator

PUBLICATIONS

Business Tendency Survey Results 2017/04 (only in Latvian)

Business Tendency Survey Results 2017/03 (only in Latvian)

Press releases

In April business environment in industry and retail trade is positive, in construction and services sector still negative

In March business environment is improving

In February business environment continues to worsen significantly in retail trade