April 24, 2020 / 9:50 AM / a month ago

Slovenia business sentiment hits all-time low as crisis saps confidence

LJUBLJANA (Reuters) - Slovenian business sentiment fell to an all-time low in April as the coronavirus crisis drained confidence across all economic sectors and among the country’s consumers.

A report by its statistics office on Friday said business sentiment fell to minus 39.5 points versus minus 3.7 in March and plus 6.7 a year ago in Slovenia, which has so far reported 1366 coronavirus cases while 79 people have died.

Slovenia closed all schools, bars, restaurants, cultural institutions, shops, apart from food and drug stores, cancelled public transport and prohibited any socialising in public spaces from the middle of March to stop the coronavirus spreading.

Many companies had to suspend production due to a lack of parts, lower demand or to try to limit the pandemic’s spread.

The Slovenian statistics office said confidence in manufacturing worsened mainly due to pessimism regarding orders and production expectations, adding that only 9% of enterprise had experienced no limits to their activity over the past month.

“The most important factors limiting production were uncertain economic conditions and ... factors like coronavirus and restrictions associated with it,” the report said.

Analysts said sentiment could improve as early as May if the coronavirus restrictions are lifted in the coming weeks.

“It all depends on how the lockdown will be ended. If bars and restaurants reopen, for example, the pessimism will ease,” Primoz Cencelj, senior portfolio manager at Generali Investments, told Reuters.

Since Monday the government has allowed the opening of car service centres and shops that sell furniture, construction materials, cars and bicycles. From May 4, hairdressers and beauty salons will also be permitted to reopen.

The Bank of Slovenia said last month the economy could shrink by between 6% and 16% this year due to the coronavirus pandemic and its consequences, after the export-oriented economy expanded by 2.4% in 2019.

Reporting by Marja Novak; Editing by Alison Williams and Alexander Smith

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