In October, the share of retailers, which noted that they do not feel any restrictive factors for their economic activity, has sharply decreased. If in September it was 22%, then in October only 16%.
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Entrepreneurial sentiment in the services sector also continued to deteriorate, and in October 2021, according to seasonally adjusted data, confidence was minus 1.2. Compared to September, this indicator has decreased by 1.8 percentage points. For the last time, the general mood in the services sector was negative in April this year.
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Sentiment indicators vary significantly across service sectors, and their trends also vary depending on the specifics of the sector, seasonal effects and the extent to which the Covid-19 pandemic affects the sector.
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There was a significant decrease in confidence compared to September in the accommodation and food service activities (both by 26 percentage points). Entrepreneurial sentiment indicators, which were positive in these sectors during the summer months and also in September, have now fallen below zero.
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However, the most pessimistic in October were providers of building maintenance and landscape architecture (minus 27.7), as well as security services (minus 19.9). Entrepreneurs in the computer programming (19.2) and insurance (18.1) sectors were the most optimistic. Overall, in October, sentiment was positive in 13 of the 30 sub-sectors of the service sector surveyed.
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Almost a third or 27% of respondents in the service sector in October did not feel any factors restricting economic activity. On the other hand, the share of respondents who indicate that the consequences of Covid-19 are a significant limiting factor for their successful economic activity has increased to 28%, which is five percentage points more than in September. The importance of financial difficulties as a limiting factor has also slightly increased (15%). The significance of other potentially limiting factors for entrepreneurship has not changed in recent months – insufficient demand (28%) and labor shortage (16%).
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According to seasonally adjusted data, the confidence indicator in construction was minus 10.3 in October, a decrease of 0.1 percentage points month-on-month. This was influenced by more pessimistic managers’ forecasts for employment development in the next three months. The confidence indicator decreased in building construction and civil engineering, but increased in specialized construction.
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In October, the construction sector was most affected by labor shortages (indicated by 29% of respondents). Compared to the previous month, the share of entrepreneurs who have indicated this factor has increased by four percentage points. The second most frequently cited limiting factor for the company’s operations was insufficient demand (noted by 27% of surveyed entrepreneurs). The negative effects of Covid-19 were reported by 9% of companies.
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Financial difficulties were mentioned by 16% of respondents, while the lack of materials or equipment and the impact of weather conditions were indicated by 12% and 11% of companies, respectively. Compared to October of the previous year, the number of companies that noted a shortage of materials or equipment and a shortage of labor has increased significantly (3.9 and 2.4 times, respectively), but the share of entrepreneurs who have indicated insufficient demand has decreased by eight percentage points. In October of this year, 24% of the surveyed construction companies did not feel any restrictive factors for their economic activity.
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In manufacturing, the confidence indicator was 0.3 in October, unchanged from September. The largest month-on-month increase in the confidence indicator was in the manufacture of rubber and plastic products, manufacture of basic metals, manufacture of machinery and equipment nec, and manufacture of electrical equipment.
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