Business Confidence Index: in optimism we trust!
19 February 2018

Thanks to a significant increase in the private sector expectations, BCI in the first quarter of 2018 has improved yet again (for the 2nd consecutive quarter), reaching 31.4 index points, which is a 3.2 index point gain over the previous quarter. Almost 60% of participating business executives expect their business will improve over the next three months.

After a significant increase of 17.2 index points in Q4, the Past Performance Index, which reflects businesses' assessment of their own economic performance in the previous quarter, decreased (-15.6 points). Compared to other sectors, the construction sector assessed their past performance most negatively, possibly due to seasonal slow-down.

Business optimism about the overall economy increased relative to both Q4 2017 (+15.5) and  Q1 2017 (+17.9), reaching 48.9 index points. The construction and service sectors have contributed the most to this increase in business optimism.

The Sales Price Expectation Index decreased moderately, still standing higher compared to last year's expectations. Businesses in the retail trade sector predict the highest price decline in the next quarter, while the highest price increase is predicted in the service sector.

Compared to large businesses, SMEs demonstrated slightly lower optimism and weaker past performance. As a result, the BCI for SMEs went down by 4.5 index points.

Irrespective of their size, the main factors that continue to limit business activities are lack of demand and access to finance.