OREANDA-NEWS  On 15 October was announced, that the Latvian entrepreneurs rated the country's economic situation pessimistically for the third consecutive quarter, and this is the seventh consecutive quarter with ratings demonstrating a downward trend, according to the results of the business activity research Parex Index conducted by Parex banka in cooperation with the public opinion research centre SKDS . Nevertheless, the mood of the entrepreneurs is showing some positive traits indicating a gradual adaptation to the new economic situation.

The last quarter has revealed a slight reduction of the pace at which the sentiments fall, dropping by 2,64 points to 41,41 points. The index has sunk more than eight points below the neutral – 50-point mark - threshold of the evaluation. Over the last seven quarters the general assessment of the entrepreneurs has dropped by almost 20 points.

In September, the Present (38,90 points) and the Future (43,92 points) indexes both were negative, showing a pessimistic outlook not only at the current situation, but also at the vision of the economic developments for the next half-year. The downfall of the Present index has slightly decelerated, which might be indicative of the fact that businesses have started to adjust to the challenging economic environment.

The evaluation of economic situation has become more pessimistic in all 26 groups of entrepreneurs analyzed during the research, and the index showed downfall in all the groups except enterprises located near Riga – this group has indicated the increase of the index by 0,87 points. Here the increase of indexes is observed in evaluating the turnover (+0,95) and the financial situation (+3,80). The most dramatic fall during the last quarter has been experienced by the large-scale enterprises (-7,58), enterprises in the Zemgale region (-6,61) and enterprises with foreign capital (-5,91).

Comparatively positive tendencies during the last quarter have been observed in the construction industry – in separate branches of this industry either a decrease of negative rating tendency or even a slight positive ascent can be noticed, implying that the enterprises working in this segment have adjusted to the current situation and are gradually recovering from the shock. Thus, for instance, in the construction industry, we see a slight increase in the evaluation of economic activity (+0,13), the sharp downfall has been stopped and stabilization in the evaluation of turnover, profitability and financial situation of enterprise can be observed. Although the sentiments of the entrepreneurs are still pessimistic, the tendency of a rapid fall is no longer visible.

Like in previous quarters, we see the decrease of almost all sub-indices (general economic activities of the country, economic activities of industries, evaluation of turnover, profitability, financial situation, and number of human resources and investment volume of enterprises). The only sub-index showing a slight ascent in the last quarter is the assessment of competition in the industry (+0,32). This also is the only sub-index that has stayed above the neutral 50-piont mark (53,28 points) and does not forecast a reduction in competition.

According to the evaluation of entrepreneurs, the country's general economic situation is still the most negatively rated index – only 26,20 points, a fall by 3,74 points over the last quarter. However, the largest decrease in the last quarter could be observed in the evaluation of turnover (-4,51) and the economic activity of the industry (-4,32).

Minor positive stabilization tendencies are observed in the sub-index of investment volume – even though in the last quarter this index has experienced a slight decline (-0,44), no sharp fall detected. Thereby, the enterprises have not fully given up the investment plans and understand the necessity of investments to outlive this economically challenging time and develop in the future.

Analyzing enterprises by industry, the index of investment volume has experienced a fall only in the services industry (-1,27), but the production (+0,80), construction (+0,29) and trade (+0,20) industries, in their turn, have seen some increase of investment volume. Interesting to note, that currently a more positive evaluation of investment volume growth is reported by small enterprises with staff not exceeding 10 people (48,68 points) contrary to a more cautious and pessimistic approach of the large enterprises with staff over 250 people (40,47 points).