March 3, 2023

Business tendency survey results and economic sentiment indicator in Lithuania

In February 2023, economic sentiment indicator decreased

In February 2023, compared to January, the economic sentiment indicator, i.e. confidence of economic actors – producers, consumers and investors – in Lithuania’s economy, decreased from minus 4.6 to minus 6.5 per cent. The services confidence indicator decreased from 8.7 to 4.1, construction – from minus 6.4 to minus 10.5, industry – from minus 14.9 to minus 16.8 per cent. The retail trade confidence indicator increased from minus 1.3 to 3, consumer – from minus 4.5 to minus 3.4 per cent.

Compared to February 2022, economic sentiment indicator decreased by 8.4 percentage points. The industry confidence indicator decreased by 19.9, services – 2.5, construction – 1.8 percentage points. The retail trade confidence indicator increased by 3.5, consumer – 1 percentage point.

Industry confidence indicator

The results of an opinion survey of industrial enterprise managers showed that in February, against January, industry confidence indicator decreased by 1.9 percentage points. This was influenced by worse assessment of the production demand and increased stocks of production.

More than half (52 per cent) of the respondents stated that production demand was sufficient, yet the proportion of those stating that it was insufficient increased from 45 to 47 per cent. In February, an increase in production in the last 3 months was indicated by 14 per cent, a decrease – 37 per cent of the respondents (a month ago, 17 and 37 per cent respectively). 74 per cent of the interviewed managers stated that the stocks of their production were sufficient, while the proportion of those who considered the stocks to be excessive grew from 19 to 21 per cent.

Expectations for the production and exports were similar as a month ago: 26 per cent of enterprises expected an increase, 14 per cent – a decrease in production. An increase in exports was expected by 17, a decrease – 13 per cent of the respondents. The majority (81 per cent) of the interviewed managers expected the number of employees to remain unchanged, 11 per cent – expected it to increase, 7 per cent – to decrease. More than half (59 per cent) of the respondents expected the prices of their products to remain unchanged in the short run, while 26 per cent expected it to increase, 15 per cent – to decrease.

Construction confidence indicator

The results of an opinion survey of construction enterprise managers showed that in February, against January, business trends in construction sector deteriorated. The construction confidence indicator decreased by 4.1 percentage points. This was influenced by worse assessment of construction work demand.

The majority (63 per cent) of the respondents stated that the construction work demand was sufficient, yet the proportion of those stating that it was insufficient increased from 29 to 36 per cent. In February, a decrease in volume of construction work was indicated by 36, an increase – 15 per cent of the interviewed (in January, 32 and 21 per cent respectively).

More than half (61 per cent) of the respondents expected the number of employees to remain unchanged in the short run, while 12 per cent expected it to decrease, 27 per cent – to increase. As regards construction orders, expectations remained similar as in the previous month: an increase in construction orders in the coming months was expected by 25, a decrease – 20 per cent. 45 per cent of the respondents expected the construction work prices to increase, 47 per cent – to remain unchanged, 8 per cent – to decrease.

Retail trade confidence indicator

The results of an opinion survey of retail trade enterprise managers showed that in February, against January, business trends in retail trade improved. The retail trade confidence indicator increased by 4.3 percentage points. This was influenced by more optimistic expectations for the changes in business situation.

The majority (83 per cent) of the managers expected their business situation to remain unchanged in the coming 3 months, while the proportion of those expecting it to improve grew from 4 to 8 per cent, to deteriorate – dropped from 17 to 9 per cent. 12 per cent of the interviewed planned on purchasing more, 11 per cent – fewer goods than a month ago, while 77 per cent of the respondents intended to purchase the same amount of goods as in the previous month.

The majority (82 per cent) of the managers expected the number of employees to remain unchanged, 11 per cent – expected it to increase. In February, 74 per cent of the respondents expected the prices of goods to remain unchanged, 25 per cent – to increase.

Like in January, the majority (68 per cent) of the managers stated that their business situation remained unchanged, improvement was indicated by 20, deterioration – 13 per cent of respondents.

Services confidence indicator

The results of an opinion survey of service enterprise managers showed that in February, against January, services confidence indicator decreased by 4.6 percentage points. This was influenced by deterioration in business situation and decrease in service demand.

The majority (73 per cent) of the managers stated that their business situation remained unchanged in the last months, while the proportion of those indicating improvement decreased from 23 to 14 per cent. The proportion of respondents indicating an increase in service demand in the last 3 months dropped from 28 to 19 per cent, a decrease – grew from 14 to 16 per cent.

However, expectations for service demand was more optimistic: an increase in the coming 3 months was expected by 24, a decrease – 16 per cent of the respondents (in January, 21 per cent each). The majority (67 per cent) of the managers expected the number of employees to remain unchanged, 28 per cent – planned on hiring new employees. 70 per cent of the respondents expected the prices of services to remain unchanged in the short run, 25 per cent – to increase.