The data show that in December 2023 the business environment was positive in the retail trade and services sectors. After a temporary improvement in construction and manufacturing in November, it worsened again and was negative in December.
Business confidence indicators characterize the general situation in the sector and they are acquired by carrying out business surveys in industry, construction, retail trade and services sectors. If the indicator is above zero, the business environment is positive, if it is below zero – the business environment is negative.
In December 2023 the confidence indicator in retail trade was 3.9, according to seasonally adjusted data, and, compared to November, it has risen by 1.1 percentage points.
In the services sector, the seasonally adjusted confidence indicator in December was 3.0, and business environment of entrepreneurs, compared to November, has improved by 3.3 percentage points, reaching the highest value since March 2023.
In construction, according to seasonally adjusted data, confidence indicator in December comprised - 11.6, which is a decrease of 0.6 percentage points as compared to the previous month.
In December, compared to November, according to seasonally unadjusted data, the assessment of entrepreneurs regarding the expected changes of employment in the next three months has decreased by 8.5 percentage points, while the assessment regarding the current overall level of orders has decreased by 3.1 percentage points. In December, compared to November, confidence indicator in civil engineering reduced by 8.5 percentage points, construction of buildings – by 6.3 percentage points, while in specialized construction activities it increased by 5.9 percentage points.
According to seasonally adjusted data, confidence indicator in manufacturing in December comprised - 9.3. As compared to November, it has dropped by 1.2 percentage points.
According to seasonally unadjusted data, compared to the previous month, business environment has worsened by their share in largest manufacturing sectors: manufacture of wood and of products of wood and cork (by 3.3 percentage points) and manufacture of food products (2.9 percentage points).
In December 2023 the economic sentiment indicator in Latvia comprised 95.9 (94.2 – in the previous month), and that is slightly higher than in the European Union as a whole (95.6). The economic sentiment indicator characterizes general socio-economic situation in the country in a defined period (month), taking components included in 15 various seasonally adjusted industry, construction, retail trade and services sector, as well as in the consumer confidence indicator, as a basis. A value of the indicator above 100 means that numeric characteristic of the economic situation exceeds long-term average value (2000-2022). An indicator below 100 means that characteristic of economic situation is below the long-term average value.
The employment expectations indicator in November comprised 100.0 (98.9 – in the previous month). It is a composite indicator composed of seasonally adjusted employment change expectations in industry, construction, retail and service sectors, taking into account the share of employment in each of these sectors. Value of the indicator above 100 means that seasonally adjusted balance of employment change expectations exceeds long-term average value (2000 – 2022). While value of the indicator below 100 means that balance of employment change expectations is below long-term average value.
The economic uncertainty indicator comprised 23.5 (20.5 – in the previous month). This indicator describes the predictability of socio-economic situation in the country and it is composed of predictability of enterprises’ economic activity indicators in industry, construction, retail trade, services sector, as well as consumers’ assessment of the predictability of household’s financial situation. If the indicator is above zero, the uncertainty of socio-economic situation is high, it’s difficult to predict its development, if it is below zero, it is easy to predict the situation, it is more certain. In December uncertainty increased in all sectors, except the services sector.
