Business downbeat in June, surveys suggest

In June 2022 business confidence indicators reduced in all business sectors according to sureveys carried out by the Central Statistical Bureau (CSB) and published June 30.

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

In June 2022 confidence indicator in retail trade, according to seasonally adjusted data, comprised - 0.9. As compared to May, this indicator has dropped by 1.8 percentage points. The seasonally unadjusted indicator was 10.7, which is significantly lower than usual during the summer.

According to seasonally unadjusted data, the most optimistic in June, the same as a month ago, were enterprises engaged in sale of motor vehicles (21.8) and retail sale of fuel (14.0). Compared to May, the confidence indicator has also increased in retail trade of food products, reaching 8.6, but in retail trade of non-food products it has not changed significantly (11.2). The only sector, where business environment worsened significantly in June, dropping below zero (- 1.7), is sale, maintenance and repair of motor vehicle parts.

The share of retail sale enterprises feeling no factors restricting their economic activity comprised 23 % in June. The share of enterprises having mentioned insufficient demand as a restrictive factor has become stable (25 %). Lack of labor force is experienced by 16 % of retail sellers, and that is 4 percentage points less than in May.

10 % of respondents mentioned that their activity is directly or indirectly negatively affected by war in Ukraine and related sanctions. 9 % of respondents mentioned price rises as a restrictive factor, which is also partially related to the war.

The most optimistic entrepreneurs are in accommodation, the most pessimistic – in publishing.

In the services sector, the seasonally adjusted confidence indicator in June 2022 was negative (- 3.9) and business environment of entrepreneurs has worsened by 1.3 percentage points, compared to May. 

The June confidence indicator in construction, according to seasonally adjusted data, is -15.5 which, compared to the previous month, has reduced by 0.4 percentage points. Confidence indicator has fallen in civil engineering, but slightly increased in construction of buildings and specialized construction activities. A rise in prices of building materials and energy resources (15 % of respondents), as well as war in Ukraine and geopolitical situation in the world (3 % of entrepreneurs surveyed) were mentioned as other factors restricting construction in June.

In June, compared to May, the confidence indicator in manufacturing has reduced by 1.7 percentage points and comprises -4.7. It was affected by a more negative forecasts of enterprise managers regarding their enterprise activity in the next three months.

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