Bulgaria’s overall business climate indicator dropped by 1.8 pps in March 2013 compared to last month, according to data of the national statistical office. The drop is due to worsened outlook in most industries including manufacturing, construction and retail trade. Inflation expectations remain low and managers in all sectors do not expect significant price increases in the coming months. The uncertain economic environment remains the most significant obstacle to the operation of all businesses.

Business sentiment in retail trade registered the largest decrease – 5.3 pps compared to February 2013. Insufficient demand became the most significant problem in the sector in March and managers expect a drop in orders to suppliers in the coming months.

The indicator for manufacturing decreased by 1.2 pps driven by the uncertain economic environment and weak domestic demand.

Business sentiment in construction deteriorated by 0.7 pps because of lower expectations for the condition of companies and overall construction activity in the next few months. Financial problems complement the lack of demand as the biggest hurdle in the sector.

The sentiment indicator in services remained unchanged compared to last month, with improvement in the outlook for demand and development in the sector. Weakness in the corporate legislature and financial problems were identified as issues of increasing importance by managers in the sector.