OREANDA-NEWS. May 12, 2011. Small entities have joined the optimism of large and medium enterprises’ heads, suggests latest Citadele Index research conducted by Citadele Bank in collaboration with market and public opinion research centre SKDS. Cautious optimism could be observed among heads of medium and large enterprises (companies employing from 50 to 249 and 250 and more employees) in the end of last year; small entities (companies employing from 11 to 49 employees) have joined them in the 1st quarter of 2011, reported the press-centre of Citadele Banka.

“Large enterprises are the first ones to feel changes in the market followed by medium and small entities. Therefore the prognosis is that micro companies will soon feel the positive tendencies of market growth as well. These companies are still rather pessimistic and are also cautious in their prognoses for the future. Purchase power in Latvia is beginning to strengthen and even grow. Small and medium enterprises mainly operate in sales and services industries therefore they start feeling the improvement in purchase power faster,” says Agnese Paegle, Head of Corporate Services Directorate of Citadele Bank.

Although generally managers’ spirits are still rather pessimistic in 1st quarter of 2011, comparing to the end of 2010, entrepreneur’s assessment of their company’s turnover, economic stability in the represented industry and company’s financial condition has improved. Comparatively smaller growth is observed in indicators of general economic activity in the State, company’s profitability, number of employees working for the enterprise and competition in the represented industry.

Assessing enterprises by turnover, companies with large turnover are in a more positive mood in 1st quarter of 2011. However comparing to the previous quarter, the value of sentiment index has increased also for a part of enterprises which have a comparatively low turnover.

Observing enterprises by the origin of capital, it can be inferred that companies with foreign capital were more optimistic in the end of 2010 and in the 1st quarter of this year. Companies with local capital still are rather pessimistic.

Citadele Index research is conducted 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.