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In April, the same as in March, business environment positive only in retail trade

Data of business tendency surveys1 carried out by the Central Statistical Bureau (CSB) show that in April 2022 business confidence indicators were negative in construction, manufacturing and services sector. Only business environment in retail trade still remains positive.

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 positive in all sub-sectors of retail trade

In April 2022 confidence indicator in retail trade, according to seasonally adjusted data, comprised 2.2. As compared to March, this indicator has dropped by 1.4 percentage points. Business environment was positive in all sub-sectors of retail trade. According to seasonally unadjusted data, the most optimistic in April were entrepreneurs in trade of motor vehicles and parts thereof, maintenance and repair of motor vehicles (15.4). As compared to the previous month, confidence indicators have risen also in retail sale of food and non-food products, reaching 7.3 and 12.6. The only sector where business environment has worsened is retail sale of fuel – even though confidence indicator is positive (3.2), compared to March, it has fallen by 5.9 percentage points.

In April, 28 % of retail sellers indicated that they feel no factors restricting their economic activity, and this is the highest value of this indicator since October 2020. Share of retail sellers having mentioned insufficient demand and lack of labour force as a factor restricting their economic activity continues to reduce. In April they comprised 25 % and 13 %, respectively. Financial difficulties restrict 10 % of retail sellers. As usual, especially restrictive factor in retail trade is competition in their trade sector (39 %). Even though in April there are no significant Covid-19 related retail trade restrictions, 6 % of retail sellers still consider that factors related to Covid-19 still significantly restrict their economic activity. 13 % of respondents mentioned that their activity is directly or indirectly negatively affected by war in Ukraine and related sanctions. 4 % of respondents mentioned price rise as a restrictive factor, which is also partially related to the war.

The most optimistic entrepreneurs are in computer programming, the most negative – in telecommunication

In the services sector, the seasonally adjusted confidence indicator in April 2022 was negative (- 3.0) and business environment of entrepreneurs has improved by 0.6 percentage points, compared to March. 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. According to seasonally unadjusted data, the most optimistic in April were enterprises in computer programming (13.5), followed by enterprises carrying out office administrative, office support and other business support activities (11.3), but third the most optimistic were enterprises in catering (10.0). In turn, the lowest confidence indicators in April were registered in telecommunication sector (- 22.2), publishing (-15.7) and warehousing and support activities for transportation (-14.0). In April environment in general was positive in 12, but negative – in 16 services sub-sectors. In two sectors (scientific research and financial services, except insurance) confidence indicators equalled zero.

In April, 35 % of respondents of services sector have not felt any factor restricting economic activity. Compared to March, their share has increased by 3 percentage points. Activity of 24 % of entrepreneurs of services sector is significantly restricted by insufficient demand, but of 16 % – by lack of labour force. The share of respondents indicating that consequences caused by Covid-19 still is a factor restricting successful economic activity has dropped to 6 %, in turn, 11 % indicated that their activity is directly or indirectly affected by war in Ukraine and related sanctions. 2 % of respondents indicate price rise, which increases costs of enterprises.

Business environment has slightly improved in construction

In April confidence indicator in construction, according to seasonally adjusted data, was -13.9 which, compared to the previous month, has risen by 0.7 percentage points. In April, compared to March, 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 more optimistic. Confidence indicator rose in all construction sectors – construction of buildings, civil engineering and specialized construction activities.

In April construction sector was mostly affected by lack of materials or equipment (indicated by 32 % of respondents, which is 6 percentage points more than in the previous month). The second most often factor restricting activity of entrepreneurs indicated still is insufficient demand (indicated by 29 % of entrepreneurs surveyed), which, as compared to March, reduced by 2 percentage points. As compared to April last year, the share of enterprises whose economic activity is restricted by bad weather conditions, has reduced by 7 percentage points (indicated by 26 % of respondents). In turn, impact of lack of labour force has increased 2.2 times and of financial difficulties – by 7 percentage points (indicated by 25 % and 19 % of respondents, respectively). Negative impact of Covid-19 in April was mentioned only by 2 % of enterprises, which is 3 percentage points less than in March. Rise in prices of building materials, fuel and energy resources (11 % of respondents), as well as war in Ukraine and geopolitical situation in the world (6 % of entrepreneurs surveyed) were mentioned as other factors restricting construction. In April, economic activity of 12 % of construction enterprises surveyed was not affected by any restrictive factor (drop of 3 percentage points, as compared to April last year).

Confidence indicator in manufacturing is reducing

In April, compared to March, confidence indicator in manufacturing has worsened by 1.6 percentage points and comprised -3.3. It was affected by a more negative assessment of enterprise managers regarding level of current orders, as well as smaller decrease in the level of stocks of finished products. The largest drop of confidence indicator, compared to the previous month, is in such manufacturing sectors as manufacture of furniture, manufacture of computer, electronic and optical products, manufacture of textiles, manufacture of wood and of products of wood and cork, manufacture of other transport equipment, manufacture of paper and paper products. In turn, there was a rise in manufacture of beverages, manufacture of basic pharmaceutical products and pharmaceutical preparations, printing and reproduction of recorded media, manufacture of rubber and plastic products, manufacture of fabricated metallic mineral products, as well as manufacture of other non-metallic mineral products.

As compared to April last year, assessment of entrepreneurs regarding the expected volume of export orders for the next three months (of which, assessment of export orders has decreased by 16 percentage points to member states of the Commonwealth of Independent States (CIS) and by 3 percentage points to the European Union (EU) ) has fallen by 8 percentage points (reducing to -0.7 percentage points). Also, competitiveness assessment of manufacturing during the last three months has worsened both in domestic and external markets (showing negative values in the European Union and countries outside the EU).

As compared to March, there was a slight drop in the number of respondents, which indicated insufficient demand and lack of labour force as a factor restricting economic activity (indicated by 25 % and 21 % of enterprises surveyed, respectively), as well as financial difficulties (indicated by 11 % of respondents). In turn, impact of lack of materials or equipment has increased (26 % of enterprises surveyed). In April, only 2 % of enterprises surveyed indicated impact of Covid-19 (compared to the previous month, reduction of 3 percentage points). As other factors restricting production rise in production costs (prices of raw materials and resources) (6 % of enterprises), war in Ukraine, political situation in the world and impact of sanctions (5 % of respondents) were mentioned. In April, economic activity of 27 % of manufacturing enterprises surveyed was not affected by any restrictive factor.

In April 2022 economic sentiment indicator comprised 95.03, (95.4 – 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.

1 Business 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.

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

3 Value 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
Phone: +371 27880666

More information on data:
Ieva Vanaga
Trade and Services Statistics Section
Phone: +371 67366738

Madara Liepiņa-Dūdele
Industrial and Construction Statistics Section
Phone: +371 67366953