Business confidence remains negative despite slight improvement

The data for this survey were collected in January.

Business confidence began to decline sharply at the end of 2021, and continued to fall until the end of 2022. There was a tentative recovery in 2023. The sentiment indicator rose slightly at the start of Q4 2024, but has been negative since the start of 2022. It is currently below the average (-4.0) for the series since 2012.

Negative business sentiment in most sectors

Business confidence is negative in nearly all sectors. Only in the information and communication sector and the business services sector are business owners slightly positive, on balance. In six out of the fourteen sectors, business confidence has improved, with the biggest rises in other services and construction. Confidence fell once again among businesses in car trade and repair and in transportation and storage. The mood in mining and quarrying deteriorated the most, and businesses in this sector are the most negative of all sectors.

The main obstacles faced by businesses

The proportion of business owners reporting reduced demand as the main obstacle increased for the seventh quarter in a row. Over 20 percent of entrepreneurs reported this. A shortage of labour remains the most frequently cited obstacle at just over 35 percent, but this percentage has been falling gradually in recent quarters.  A shortage of production resources has been reported less and less frequently as the main obstacle faced by businesses since mid-2022, and the number now reporting this stands at 7 percent.  Almost 34 percent of businesses say they are not facing any obstacles.

Businesses less negative about profitability

Around the same number of businesses reported improved profitability as reported a deterioration in profitability in the previous quarter. On balance, therefore, the mood was neutral. One year previously, just over 5 percent of businesses reported a deterioration in profitability. The mood regarding profitability improved the most in real estate activities, with  a rise from almost -15 percent to just over 7 percent. In construction and business services (now the most positive sector), the mood also changed from mainly negative to positive. In car trade and repair and transportation and storage, among others, sentiment actually deteriorated. The sector with the worst sentiment regarding profitability was agriculture, forestry and fisheries.

Investment outlook for 2024 less positive

Businesses’ investment expectations for the current year are also close to neutral. One year ago, just over 3 percent more businesses expected to see an increase in investment rather than a decrease. Expectations regarding investment have declined the most in the information and communication sector and the car trade and repair sector. Business owners in these sectors expect to invest less than last year. The same applies to the accommodation and food services and wholesale trade sectors. Only in the retail sector have overall expectations turned positive, whereas one year ago they were negative. Businesses in real estate are the most positive regarding future investment. The most negative expectations are in agriculture, forestry and fisheries.