Business confidence slightly improving in Latvia

Data published on February 28 by the Central Statistical Bureau (CSB) show that in February 2023, business confidence indicators were positive in the retail trade and services sector, while in manufacturing and construction, although continued to improve, business confidence indicators still are negative.

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, business environment is positive, if it is below zero – the business environment is negative.

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In February 2023 confidence indicator in retail trade was 6.8, according to seasonally adjusted data, and, compared to January, it has reduced by 0.1 percentage point.

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In the services sector, the seasonally adjusted confidence indicator in February 2023 was 3.4 and business environment of entrepreneurs, compared to January, has worsened by 0.7 percentage points. 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 and seasonal impact. The most optimistic entrepreneurs in February were in computer programming (21.3), insurance (21.7) and advertising and market research (20.7). But the lowest indicators of environment were in land transport sector (- 19.7), catering (- 13.7) and accommodation (- 13.6). 

According to seasonally adjusted data, in February confidence indicator in construction comprised - 10.8, which is an increase of 0.8 percentage points as compared to the previous month.

In February, compared to January, according to seasonally unadjusted data, the assessment regarding the expected changes of employment in the next three months has improved by 13.9 percentage points, as well as the assessment regarding the current overall level of orders has grown by 2.1 percentage points. Confidence indicator in February, compared to January, has grown in construction sub-sectors – in civil engineering by 16.4, in construction of buildings – by 2.9, but in specialized construction activities – by 2.1 percentage points.

According to seasonally adjusted data, in February confidence indicator in manufacturing comprised - 6.8. As compared to January, it has increased by 0.6 percentage points .According to seasonally unadjusted data, compared to the previous month, confidence indicators have risen by their share in largest manufacturing sectors – manufacture of wood and of products of wood and cork (of 11.1 percentage points), manufacture of food products (0.5 percentage points) and manufacture of fabricated metal products, except machinery and equipment (0.9 percentage points).

In February 2023 economic sentiment indicator comprised 95.2, (93.5 – 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 indicator4, as a basis.

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