Business tendency, Slovenia, July 2021
Confidence lower in all four economic sectors
In July 2021, the confidence indicator was lower in retail trade, services, construction and manufacturing. The main limiting factor in manufacturing is the lack of raw materials, in services and trade the coronavirus, and in construction the high cost of materials.
In July 2021, the confidence indicator in manufacturing decreased by 1 percentage point (p.p.). It was 22 p.p. higher than in July 2020 and 10 p.p. above the long-term average.
Most of the monthly indicators of the situation and expectations deteriorated, with the exception of the expected production indicator, which improved by 3 percentage points (p.p.). The employment expectation remained the same as in the previous month.
Shortage of raw materials the main limiting factor
In July 2021, the current capacity indicator was 86.2%, 1.6 p.p. higher than in April 2021. Most of the quarterly indicators improved. The manufacturing enterprises were pessimistic in assessing their current production capacities, which decreased by 5 p.p., and their new orders, which decreased by 2 p.p. The competitive position on the EU market improved by 4 p.p., on the domestic market by 2 p.p. and on non-EU markets 1 p.p. The most important factor limiting production was shortage of raw materials (stated by 31% of enterprises), followed by shortage of skilled labour (stated by 30% of enterprises) and uncertain economic conditions (stated by 28% of enterprises).
Retail trade confidence indicator lower
The confidence indicator in retail trade fell after several months of growth. Compared to June 2021, it was 10 p.p. lower, while it is still higher than the long-term average and in July 2020 (by 5 and 9 p.p., respectively).
Most of the indicators deteriorated, except the indicators of expected sales and expected employment, which increased by 9 and 2 p.p., respectively.
The main limiting factors are similar to the previous quarter: competition in the sector (44% of enterprises), high labour costs (31% of enterprises) and coronavirus (29% of enterprises). The first two did not change much compared to the previous quarter, while the share of enterprises restricted by the coronavirus decreased by 14 p.p. (from 43% to 29% of enterprises).
Construction confidence indicator lower
In July 2021, the value of the indicator was 1 p.p. lower than in June 2021. Compared to July 2020, the indicator was 24 p.p. higher and it was 28 p.p. higher than the long-term average.
At the monthly level most situation and expectation indicators decreased, mainly the employment expectations and assessment of building activity, which decreased by 5 p.p. each. The overall order books indicator increased by 2 p.p.
Most construction enterprises stated high cost of material as the main limiting factor in their activities in July 2021 (52%). This was followed by shortage of skilled labour (44%) and high cost of labour (27%).
Services confidence indicator lower
The confidence indicator in services was 4 p.p. lower than in June 2021, thus remaining only 1 p.p. above the long-term average. Compared to July 2020, it was still up by 34 p.p.
The values of the situation indicators increased, except the business situation indicator, which decreased (by 4 p.p.). The value of the expected sales price indicator also increased, while expected demand and employment show a decrease.
The main limiting factor is still the coronavirus, but the indicator is lower by 15 p.p. compared to April 2021. This time, 29% of enterprises faced this limitation. Immediately behind it is insufficient demand (28% of enterprises, 2 p.p. fewer than in the previous quarter). However, 26% of enterprises stated that there were no limits in their activity, while 25% estimate that they are limited by labour shortages.