Press Release

In February business environment continues to worsen significantly in retail trade

Data of business tendency surveys carried out by the Central Statistical Bureau (CSB) show that in February 2021 business confidence indicators improved in services sector, slightly worsened in construction and industry, but in retail trade sector there was a significant drop.

Business confidence indicators characterize 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, business environment is positive, if it is below zero – business environment is negative.

Confidence indicator in retail trade continues to reduce

According to seasonally adjusted data, in February confidence indicator in retail sale was -19.4, which is a drop of 3.6 percentage points as compared to January. Confidence indicator has reduced both in food and non-food retail trade, but increased in retail trade of fuel. Business environment has also worsened in sale of motor vehicles, but improved in sale of motor vehicle parts and accessories, maintenance and repair of motor vehicles. The lowest indicator (-37.7) is in retail sale of non-food products, and for the second month it is below the lowest indicator of 2020 in April (-30.4), also exceeding the lowest value of economic crisis in 2008–2009 (-36.3).

In February 55 % of retail sale enterprises indicated that their economic activity is significantly restricted by impact of COVID-19. Compared to January, this indicator has not changed significantly. Also competition in trade sector (32 %) and insufficient demand (26 %) significantly restricts successful activity of retail trade enterprises. In February share of enterprises in retail trade feeling no factors restricting economic activity continued to reduce. Their share comprised only 12 %.

Business environment is the lowest in services sector

In services sector in February, according to seasonally adjusted data, confidence comprised -22.5. As compared to January, this indicator has grown by 4.6 percentage points. Especially low confidence indicators still are in catering (-61.2 %), accommodation (-66.7 %), as well as in transport by air (-43.1 %). It must be mentioned that, compared to January, in catering and accommodation, as well as in travel agency and tour operator sector business environment has improved. In February positive confidence values were in insurance sector (23.7 %), telecommunication services (2.7 %) and computer programming (5.2 %). On the background of other services sectors especially optimistic are providers of postal and courier activities (33.3 %).

In February, 26 % of respondents of services sector have not felt any factor restricting economic activity, but 34 % of respondents indicated that consequences from COVID-19 is a significant factor restricting successful economic activity. Also insufficient demand and financial difficulties was significant restrictive factor in services sector, which was indicated by 36 % and 15 % of entrepreneurs surveyed, respectively.

Confidence indicator in construction sector the second lowest among all areas

In February this year, compared to the previous month, confidence indicator in construction has fallen by 0.4 percentage points, reducing to -21.6, which was affected by a more pessimistic assessment of entrepreneurs regarding level of construction orders. Confidence indicator decreased in construction of buildings and specialized construction activities, but increased in civil engineering.

In February construction sector was mostly affected by bad weather – it was mentioned as a factor restricting economic activity of enterprises by 54 %. In February 13 % of respondents indicated negative impact of COVID-19. However, the number of enterprises indicating lack of insufficient demand (33 %), financial difficulties (9 %) and lack of labour force (8 %) as a restrictive factor has slightly reduced. In February share of enterprises in construction feeling no factors restricting economic activity continued to reduce (14 % of respondents).

Confidence indicator in manufacturing still is the highest

In February confidence indicator in manufacturing comprised -7.4 (0.7 percentage point less than in January), which was affected by a negative forecasts of company managers regarding level of production orders. The largest drop of confidence indicator, as compared to January, was in such manufacturing sectors as manufacture of basic pharmaceutical products and pharmaceutical preparations, manufacture of chemicals and chemical products, manufacture of furniture, manufacture of motor vehicles, trailers and semi-trailers and manufacture of wearing apparel. But increase was observed in printing and reproduction of recorded media, repair and installation of machinery and equipment, other manufactured goods n.e.c., manufacture of rubber and plastic products, manufacture of non-metallic mineral products and manufacture of wood and of products of wood and cork. As compared to the previous months, business environment has improved regarding own enterprise's activity (expected rise in the production activity) and expected sale price of goods and development of employment in the following three months.

As compared to January, slight growth was observed in the number of enterprises indicating insufficient demand (38 % of respondents), lack of labour force (14 %) and lack of materials or equipment (13 %) out of all factors affecting production in enterprise. In February 16 % of respondents indicated impact of COVID-19. In February, economic activity of 28 % of manufacturing enterprises surveyed was not affected by any restrictive factor.

In February 2021 economic sentiment indicator comprised 88.53, which is 1.3 points more than in January. 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 indicator, as a basis.

More information on business indicators is available in Official statistics portal section “Business tendency”.

1Business surveys in industry, construction, retail trade and services sector are carried out by the CSB monthly, accordingly methodology of the Joint Harmonised EU Programme of Business and Consumer Surveys co-financed by the European Commission.

2Net (balance) is calculated as difference between positive and negative answers of entrepreneurs surveyed, which are expressed in per cent.

3Value of the indicator exceeding 100 means that numeric characteristic of the economic situation exceeds long-term average value (2000 – 2019). While value of the indicator smaller than 100 means that characteristic of economic situation is below long-term average value.

 

Media requests:
Communication Section
E-mail: media@csb.gov.lv
Phone: +371 67366621, +371 27880666

More information on data:
Ieva Vanaga
Trade and Services Statistics Section
E-mail: Ieva.Vanaga@csb.gov.lv
Phone: +371 67366738

Madara Liepiņa
Industrial and Construction Statistics Section
E-mail: Madara.Liepina@csb.gov.lv
Phone: +371 67366953

 

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