Development of Industry in the First 6 Months of 2026

Overall business sentiment in Bulgaria is based on the weighted average of the four sectoral business climate indicators: industry, construction, retail trade, and services. This article focuses only on the business climate in industry.

Current production

Current production activity started almost neutral in January, improved in February, but remained volatile and negative again from March to June. This suggests that industrial firms did not experience a sustained recovery in actual output despite an initial uptick.

Order books

The overall order book balance remained clearly negative throughout 2026, both for domestic and foreign orders, with foreign orders especially weak. This points to persistent demand pressure on the industrial sector from both the local and external markets.

Expectations for the next 3 months

Expected production over the next three months stayed in positive territory, while uncertainty about future developments declined compared with 2024–2025. This means firms were cautiously optimistic about the short term, even though current activity remained weak.

Prices and employment

Expectations for selling prices were clearly positive, suggesting upward price pressure, likely due to costs or an attempt to offset weak demand. Employment expectations were only slightly positive, indicating no major wave of layoffs, but also no strong plans for hiring.

Business climate and obstacles

Industrial business climate remained moderately positive, while confidence hovered around neutral or slightly negative levels. The main obstacles continued to be insufficient demand, labour shortages, and an uncertain economic environment, although the share of firms reporting no difficulties increased slightly.

Conclusions

• Current production remains weak, with no durable recovery.
• Demand, both domestic and foreign, remains the main structural problem.
• Expectations for future activity are better than assessments of the present situation.
• Price pressure and labour shortages continue to limit growth.
• Uncertainty is easing, but it remains important, while a small share of firms now report no major difficulties.