Citadele Bank (Latvia)
The mood of Latvian business owners this autumn is the best it has been in the past five years, with large businesses even reaching optimism levels last seen before the financial crisis, according to Citadele Index.
The mood of Latvian business owners has improved this autumn, with a Citadele Index score of 52.4 points, compared with 51.3 in the previous quarter. This is employers’ most optimistic mood since the start of 2013, when the Citadele Index was at the same level.
Furthermore, the mood of Latvian large business owners has reached long-unseen levels of optimism and is now at pre-financial crisis levels. Businesses with more than 250 employees have a Citadele Index level of 62.5 points this autumn which is the highest since the end of 2006, when it was at 63.5.
Nonetheless, the mood of small- and medium-sized businesses is more cautious. With an index of 57.0, heads of medium-sized businesses with between 50 and 249 employees are optimistic. Small businesses which employ from 10 to 49 employees have an index of 52.6, while the optimism of microbusinesses is more guarded at 50.6 points.
“The growing economy and the positivity of employers is a good thing in general, although it must be mentioned that small businesses don’t seem to be fully enjoying this positive wave in the economy yet,” says Citadele Bank economist Mārtiņš Āboliņš. “All aspects of the index finally have positive ratings: activity both countrywide and in the sector; competition in the sector; turnover; profitability; overall financial situation; number of employees; and investments. Last quarter, business owners’ feelings on profitability and their financial situation remained pessimistic. Meanwhile, during this quarter the retail and service industries had the tendency to improve, while construction and manufacturing—which were for a long time the most optimistic sectors in Latvia—had a decrease in optimism.”
An optimistic mood has been reported in all areas of the economy, and in the past quarter, the mood of the service industry has seen a particularly significant improvement, with its index growing to 52.9. Construction has a similar level of optimism with an index of 52.6, while heads of manufacturing and retail businesses feel slightly less optimistic, with indexes of 52.7 and 51.4 respectively.
Within the service industry, the most optimistic is the IT industry, while education, transport and storage service providers are more cautious.
In general, the mood has improved for both exporting and local businesses. The index for exporting businesses is 55, while the optimism of businesses who do not export has reached 51.26 points.
About Citadele Index
The Citadele Index is a survey which has been undertaken by Citadele Bank since 2004. Each quarter, the bank surveys 750 business owners and leaders. The survey and data collection is provided by market and public opinion research company SKDS. Manufacturers, retailers, builders and service providers from all regions of Latvia expressed their opinion in the survey.
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