NBB business climate index gradually improving

<p> The seasonally adjusted Business Climate Index (BCI) measured by the National Bank has been gradually improving since early 2021. Compared to the index for the previous three months, it increased by 2.9 pp and made minus 1.1%. The actual BCI for May-July 2021 was 6.5%, up 8.1pp from February-April 2021. </p> <p>   </p> <p> “The increase in the BCI was due to an increase in production (mainly at industrial enterprises), a significant slowdown in demand reduction amid prevailing optimistic expectations of changes in these indicators in the next three months,” the National Bank said. </p> <p>   </p> <p> Economic conditions improve in May-July </p> <p>   </p> <p> Survey participants say the economic situation in May-July 2021 improved compared to the previous three months, 54.6% of respondents named it favourable (45.8% in February-April 2021), while 43.5% (52.8%) named it unfavourable. </p> <p>   </p> <p> The economic situation of their enterprises was described as satisfactory by 69.9% of the heads of enterprises; poor by 20.1% (67.5% and 24.9%, respectively, three months earlier). </p> <p>   </p> <p> Demand recovery trend continues </p> <p>   </p> <p> According to the CEO-made estimates, over the past three months the trend towards recovery of demand continued. The balance of responses on this issue amounted to minus 3.6% (in the previous reporting period - minus 18.1%). Demand recovery was reported by construction enterprises, transport enterprises and trading companies. The increase in demand for their products was also marked by industry. </p> <p>   </p> <p> Production reaches positive values for the first time since 2019 </p> <p>   </p> <p> According to estimates made by survey participants, in May-July 2021 production reached a positive value of 1% for the first time since 2019 (in February-April 2021 it was minus 16.1%). </p> <p>   </p> <p> The factors limiting production growth, as cited by CEOs, were as lack of cash receipts to finance current operations (45.7% of the respondents), non-payments by consumers (44.9%), shortage of floating assets (42.4%), insufficient demand for products (35.7%) and high prices for raw materials and goods (34.3%). </p> <p>   </p> <p> Businesses lack working capital </p> <p>   </p> <p> The lack of working capital in May-July 2021 was stated by 54.2% of enterprises covered by the survey (in February-April 2021 - 56.7%). By types of activity 64.9% of construction enterprises, 60.6% of transport enterprises, 51.4% of industrial enterprises and 49.7% of trade enterprises reported working capital deficit. </p> <p>   </p> <p> The majority of heads of enterprises evaluated the impact of credit conditions on their economic activities as moderate (61% of the total number of survey participants). Among the lending conditions that worsened over the past three months, 22.3% of the respondents named a change in cost of borrowing and 22.4% named a change in credit terms. </p> <p>   </p> <p> In May-July 2021, 70.7% of respondents favoured the stability of the Belarusian ruble. A reinforcement of the national currency would be preferred by 16.3% of respondents, while 12.9% of survey participants pointed out to the expediency of its devaluation. In addition, the respondents noted a certain decline in the degree of influence of changes in the exchange rate of the Belarusian ruble on their economic activities, the balance of answers to this question decreased from 10.5% to 7.3%. </p> <p>   </p> <p> The impact of fluctuations in the exchange rate of the national currency on their activities was felt most strongly by industrial enterprises and trading organizations. </p> <p>   </p> <p> Economic situation in industry </p> <p>   </p> <p> The economic situation in May-July 2021 was named favourable by 59.7% of industrial enterprises (in February-April 2021 - 53.3%), at that 70.6% of directors regarded their economic situation as satisfactory, and 17.4% - as bad (69.6% and 20.8% respectively, three months earlier). </p> <p>   </p> <p> In May-July industry’s seasonally adjusted index of economic sentiment slowed down: as compared to the indicator of the previous three months it decreased by 0.8 p.p. and made 5%. </p> <p>   </p> <p> Industry’s actual index increased by 1.7 p.p. and in May-July 2021 stood at 7.9%. The growth of the index was facilitated by a slowdown in the rate of decline in orders on the domestic and foreign markets, reduction of finished stock at warehouses, as well as the prevailing optimistic expectations of respondents regarding changes in production volumes in the coming three months. </p> <p>   </p> <p> Economic situation in construction </p> <p>   </p> <p> 50.9% of construction enterprises named unfavourable economic situation in May-July 2021, whereas in February-April the share of such enterprises amounted to 61.5%. Economic situation of their enterprises was assessed as satisfactory by 67.7% of managers, as poor by 25.9% (in February-April 2021 - 63.8% and 31.8%, respectively). </p> <p>   </p> <p> The sector’s seasonally adjusted index of economic sentiment continued to improve, making minus 14.6% in May-July 2021 (minus 18% three months earlier). </p> <p>   </p> <p> The construction sector’s actual index increased by 10.4pp to minus 8.5%. The improvement in the index was due to a significant slowdown in the rate of decline in orders in the domestic and foreign markets, while respondents' expectations of changes in employment were predominantly pessimistic. </p> <p>   </p> <p> Economic conditions in transport sector </p> <p>   </p> <p> According to estimates by CEOs of transport companies, the economic situation in May-July 2021 was better than in the previous three months, and 47.7% of the respondents described it as favourable, whereas in February-April 2021 the proportion of such answers was 34.9%. The economic position of their enterprises was described as satisfactory by 65.8% of the managers, as poor by 27.1% (in February-April 2021 - 60.1% and 34.4%, respectively). </p> <p>   </p> <p> Economic situation in trade sector </p> <p>   </p> <p> The economic situation in May-July 2021 was estimated as favourable by 53.4% of trading enterprises (in February-April 2021 - 43.9%), while 74.3% of the enterprises covered by the survey referred to their economic situation as satisfactory (71.9% in the previous accounting period), 16.1% (21.2%) - as bad. End </p>

2021-08-25

Primepress