Business Confidence Index: Summertime Sadness!
BCI in the third quarter of 2019 has deteriorated, dropping to 8.3 index points, which is 18.7 index points below the previous quarter. The largest reduction in BCI was observed in retail trade followed by the financial and construction industries. In these sectors, the decrease in BCI is driven by both decline in past performance and reduced expectations. On the contrary, agriculture is the sole industry where BCI increased.
The Past Performance Index, which reflects businesses' assessment of their own economic performance in the previous quarter, showed a downward trend, decreasing by 23.5 points in Q3 2019.
Business optimism decreased significantly after a recent improvement in the previous quarter and dropped to 21.7 index points. Other than retail trade, service and construction have contributed the most to this reduction in business optimism. Expectations have increased only in agriculture.
The Sales Price Expectation Index decreased moderately. Businesses in service and manufacturing predict lower prices compared to the previous quarter, while other sectors expect higher prices.
Expectations worsened for large businesses as well as for SMEs, while past performance decreased for large businesses and moderately improved for SMEs.
The main factor that continues to limit business activities for large businesses is lack of demand, while for SMEs the limiting factor is access to finance.