Firms in industry excluding construction and in services reported generally positive views on the growth in their turnover, albeit slightly less so than in 2015. Conversely, in construction, following last year’s slight recovery, the number of firms reporting a contraction in economic activity again exceeded those reporting an expansion. Demand expectations are optimistic but more cautiously so than in 2015, even for exporting firms.
In 2016 more than 80 per cent of firms in industry excluding construction and services recorded investment expenditure equal to or greater than that planned at the end of 2015, which on average implied a faster rate of investment. For 2017 most firms expect their expenditure to increase thanks to favourable demand expectations; a small share plans to reduce it instead, owing to persistent uncertainty about the economic and political situation.
Firms’ assessments of profitability improved further. A vast majority of them expect to close the year with a profit; the share is higher for firms in industry excluding construction and in services compared with those active in construction.
Firms in industry excluding construction and in services reported a further easing in credit conditions, although their demand for borrowing remains low. The positive trend in profitability facilitated the accumulation of liquid holdings for about one fifth of firms in industry excluding construction and in services. Reports of stability in firms’ borrowing conditions and liquidity are instead prevalent in the construction sector.