OREANDA-NEWS. May 18, 2011. Company heads who work in rural districts are more optimistic than entrepreneurs who work in Riga and other cities of Latvia, suggests latest Citadele Index research conducted by bank Citadele in collaboration with market and public opinion research centre SKDS, reported the press-centre of Citadele Bankas.

The research suggests that the sentiment of rural entrepreneurs’ has significantly improved during the 1st quarter of 2011, exceeding sentiment indicators of entrepreneurs who work in Riga and other cities of Latvia. In comparison to the last quarter of 2010 when it reached the lowest point of the whole year, the sentiment can be characterized as rather optimistic.

Conversely, observing sentiment of entrepreneurs by regions, Citadele Index data suggests that entrepreneurs who work in Riga feel comparatively better however their sentiment can still be characterized as rather pessimistic, just like the one of entrepreneurs from other regions (Riga district, Vidzeme, Kurzeme, Zemgale, and Latgale).

Citadele Index data shows that improvement of conditions in their represented industry (+8.7 points) and a more positive assessment of the company’s turnover (+7.6 points) were the reasons that determined improvement of entrepreneurs’ sentiment.

Simona Strizevska, Economist of Market Analysis Department at “Citadele Asset Management” says: “Increase in purchasing prices during the last six months could be the reason why rural entrepreneurs’ sentiment was influenced in positive direction. For example, purchasing prices in grain cultivation, on their part, were almost twice as high as last year. In dairy and livestock farming industries increase in purchase prices has been comparatively modest and as of end of March was below 22% and 4%. Dynamics of resource purchase prices partly were also determined by increase in turnover in these industries – turnover in these industries during the last half year has increased by 35% in comparison to a corresponding period last year.”

Observing changes in entrepreneurs’ sentiment by location of enterprises, Citadele Index data shows that during the 1st quarter of this year the sentiment of entrepreneurs who work in Riga has slightly went into the pessimistic direction in comparison to the end of the last year. In other cities of Latvia, however, entrepreneurs’ sentiment has increased if compared with the end of the last year. However, regardless of the significant improvement of company heads who work in rural areas during this quarter, which presently can be characterized as rather optimistic, the sentiment of entrepreneurs in Riga and other cities of Latvia still remains rather pessimistic.

Considering the sentiment of entrepreneurs by regions, Citadele Index research shows that during the first quarter of this year, sentiment indicators have significantly increased for company heads in Zemgale, Kurzeme and Latgale comparing to the end of the last year when they still felt expressly pessimistic whereas now they are rather pessimistic. Since the end of the last year already, entrepreneurs in Riga and its surrounding district and in Vidzeme are in a better sentiment than their colleagues in Zemgale, Kurzeme and Latgale the sentiment of which has not changed notably since the end of the last year. However, both – now and in the end of last year it could be characterized as rather pessimistic.

Citadele Index research is conducted in Latvia on a quarterly basis in order to find out entrepreneurs’ evaluation of the present situation and prognoses for the next 6 months in such fields as general economic activity in the State and corresponding business field. The previous research, which was carried out in March 2011 polled 750 heads of companies of various sizes from all regions of Latvia representing various spheres of national economy.

About Citadele Index
The key task of Citadele Index is to obtain a unified index that characterizes entrepreneurs’ subjective assessment of economic conditions in the state. Citadele Index is calculated by summing up and assessing poll results obtained from heads of 750 enterprises of various volumes and representing various industries. The index also reflects entrepreneurs’ opinion and situation prognoses for economic activity in the State, economic activity in different industries and various business activity indices: profitability, turnover, financial condition, number of employees and amount of investments. If the index exceeds the value of 50 points, it speaks of optimism among entrepreneurs. Pessimism can be observed when it drops below the value of 50. Citadele Index study is performed on a quarterly basis.