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Citadele Index: businessmen are looking towards the future with optimism

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUGenerally businessmen look towards the future with optimism, as stated in the latest Citadele Index study. It is expected that Latvia’s economy will continue growing in 2018. Citadele Bank’s experts believe the current economic situation is stable and represents a good time for investments.

For the fourth consecutive quarter Citadele Index’s value exceeds 50 points, which points to businessmen’s optimism. In the last quarter its value was 51.34 points. Businessmen are generally positive about the economy in the country and their finances.

Optimism was observed in all sectors of the national economy in the last quarter. Representatives of production and construction sectors are the most optimistic. Workers of service and trade sectors are more cautious in spite of their general optimism.

Citadele Index also shows that looking at the number of employees, the largest amount of optimism is noted among CEOs of large companies, followed by medium and small-sized companies. CEOs of micro-enterprises (with nine or fewer employees) felt the most optimistic in 2014. Although their general mood has improved over the course of the last twelve months, CEOs remain somewhat pessimistic.

«Approximately one-third of Latvian businessmen expect economic activity in Latvia to increase in the next six months. As many businessmen expect their turnover to increase. Two tendencies have surfaced so far. First of all, problems with attraction of workers in construction (73%) and production (55%) increase the desire of large companies to automate operations (50%). Secondly, the gap between large and small companies continues growing. This means large companies are becoming larger and small companies are falling behind even more,» says Citadele Bank’s economist Mārtiņš Āboliņš.

A positive outlook for the future motivates large and medium-sized companies to consider expanding operations and improving competitiveness. 44% of companies have investment plans for this year (79% large and 61% medium-sized companies).

«Any company with a clear vision for development and good financial management has the option to grow by using the economic situation in Latvia and the world. Small companies should consider this. Although 42% of small companies consider preserving their operations as their main challenge for 2018, only 7% view export growth as the biggest challenge of the year. The mood of exporting businessmen, according to data from Citadele Index, is more optimistic than the mood of non-exporting ones. A clear vision for the search of new markets and opportunities for funding attraction can help small companies reinforce their positions in a long-term perspective,» says Citadele Bank board member Santa Purgaile.

A generally optimistic mood was also voiced by Latvia’s largest grain processing company Dobeles dzirnavnieks: «We continued investing in the company’s development in the last several years. We will continue investing in company growth. Total investments will reach EUR 10 million. The main investment targets are associated with grain storage and processing output increase. We expect to process more than 250,000 tonnes of grains this year,» says Dobeles dzirnavnieks board chairman Kristaps Amsils.

750 CEOs are interviewed every quarter as part of Citadele Index survey to acquire information regarding the economic state of the country, specific industries, as well as to paint an outlook for the future. Responses and data compilation is performed by SKDS.


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