Business tendency surveys carried out by the Central Statistical Bureau (CSB) show that in July 2023 the business environment worsened in industry and construction, in the services sector and retail trade. The retail trade is the only sector where the confidence indicator, even though reduced, still is positive.
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 sector. If the indicator is above zero, the business environment is deemed positive, if it is below zero, the business environment is deemed negative.
In July, 23 % of retail sellers indicated that they feel no factors limiting their economic activity, and this is four percentage points less than in June. The largest share of retail sellers (49 %) indicated competition in trade sector as a limiting factor. As compared to June this indicator has grown by three percentage points. 19 % of retailers indicated lack of labor force as a limiting factor, but 28 % – insufficient demand. 12 % of retailers indicated that their activity is limited by various other factors, for example, availability of goods, high prices of energy resources, and the geopolitical situation.
Insufficient demand as a limiting factor was mentioned by 47 % of manufacturing enterprises. Lack of labour force and lack of materials or equipment was indicated by 20 % and 11 % of respondents, respectively, also financial difficulties were mentioned by 11 %. Impact of other factors was indicated by 8 % of enterprises (inflation and impact of war in Ukraine is mentioned the most). 26 % of manufacturing enterprises have not felt any factor limiting economic activity.
One crumb of confort was that in July 2023 the overall economic sentiment indicator in Latvia stood at 93.5, up from 93.0 in June. In July, a rise in the indicator of consumer confidence contributed to the growth of the economic sentiment indicator in Latvia. In Lithuania and Estonia economic sentiment indicator in July is 93.7 and 79.8, respectively. In Estonia this indicator has a clear downward trend for almost two years now, and also in July both consumer confidence and confidence indicators in all business sectors are lower than in other Baltic countries.
