Business tendency, Slovenia, July 2020

Again improvement of the confidence indicators in all economic activities

In July 2020 the confidence indicators improved again in all economic activities.

  • 7/24/2020
  • |
  • final data

Manufacturing confidence indicator higher

In July 2020 the manufacturing confidence indicator was 8 percentage points (p.p.) higher than in June 2020. Compared to July 2019 it was lower by 12 p.p. It was also 12 p.p. below the long-term average.

At the monthly level all situation and expectation indicators improved. The production indicator and the production expectations indicator improved the most (each by 13 p.p.).

Uncertain economic conditions still the main limiting factor

In July 2020 the current capacity indicator was 76.6%, 5.5 p.p. higher than in April 2020. Most of the quarterly indicators improved. The manufacturing enterprises were only pessimistic in assessing their current production capacities according to the expected demand in the next 12 months (by 4 p.p.). The competitive position on the EU market improved by 3 p.p., and on the domestic and non-EU markets by 2 and 1 p.p., respectively. The manufacturing enterprises were the most optimistic about the new orders (the indicator went up by 7 p.p.). The most important factor limiting production was uncertain economic conditions (stated by 44% of enterprises) and insufficient domestic demand (39% of enterprises). 13% of enterprises experienced no limits in their activity.

Retail trade confidence indicator higher

In July 2020 the retail trade confidence indicator was 13 p.p. higher than in June 2020. Compared to July 2019, it was 9 p.p. lower and 4 p.p. below the long-term average.

The values of the situation and expectation indicators deteriorated, except the selling prices, the sales, the expected employment and the volume of stocks indicators. The sales indicator and the volume of stocks indicator improved the most and had the greatest impact on the increase in the confidence indicator. The sales indicator increased after six months of decline.

The most important factor limiting the enterprises in retail trade was competition in own sector, which was stated by 49% of enterprises, 13 p.p. more than in the previous quarter. This was followed by low demand (35% of enterprises) and high labour costs (30% of enterprises).

Construction confidence indicator higher

In July 2020 the construction confidence indicator was 5 p.p. higher than in June 2020 and 16 p.p. lower than in July 2019. It was also 4 p.p. above the long-term average.

At the monthly level all situation and expectation indicators improved, except the technical capacity indicator, which worsened by 3 p.p. The employment indicator and the assessment of building activity indicator improved the most (by 10 and 7 p.p., respectively).

The most frequent limiting factor among construction enterprises was shortage of skilled labour and competition in own sector (each stated by 31% of enterprises), followed by high cost of labour (24% of enterprises). 15% of enterprises experienced no limits in their activity.

Services confidence indicator higher

In July 2020 the services confidence indicator was 2 p.p. higher than in June 2020. Compared to July 2019, it was 44 p.p. lower and 36 p.p. below the long-term average.

The values of the situation and expectation indicators increased, except the expected demand indicator, which decreased. The demand, the employment and the business situation indicators improved again after a few months of decline.

The factor limiting service enterprises the most was insufficient demand (in 41% of enterprises), followed by financial constraints (18%). 24% of enterprises experienced no limits in their activity.

Monthly changes in the value of confidence indicators, Slovenia, July 2020
Monthly changes in the value of confidence indicators, Slovenia, July 2020
Source: SURS
METHODOLOGICAL NOTE
Data are seasonally adjusted.
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