By Paul Bolding
VIENNA, March 3 (Reuters) - The business climate in central
and eastern Europe in January was steady compared with last
September, though foreign investors were more cautious about the
region's economies, a survey showed on Monday.
The Reuters & OeKB CEE Business Climate index <REUTERSOEKB>,
based on a poll of 400 international firms managing 1,400
companies in the region, was unchanged at 55 in January from
last September.
The results show that managers remain optimistic about
growth prospects. The index is the balance between positive and
negative responses and shows optimism as long as it is greater
than zero.
"The business climate stabilised at a high level, which was
also reflected in the expansion strategies of the companies.
About 40 percent of the foreign subsidiaries are being expanded
and new markets secured," Austrian export financing bank
Oesterreichische Kontrollbank (OeKB), which prepared the survey,
said in a statement.
"However, the very positive prevailing mood of direct
investors at the start of 2007 could not be maintained."
The survey comes after a quarterly World Bank report on the
region in January said fundamentals were broadly unchanged.
"GDP growth is still robust but concerns remain for those
countries where large current account gaps persist," it said,
adding deficits were still widening in Bulgaria and Romania.
The Reuters & OeKB survey showed the business climate was
most positive on Russia, Ukraine and Romania, though still below
the highs when the survey was first published in January 2007.
The survey was published three times last year -- in
January, July and September -- but is now quarterly.
The latest report showed Russia rose to 72 from 63 last
time, Ukraine rose to 67 from 56 and Romania was at 66, up from
59 last time.
"In these three countries, participants expect particularly
dynamic economic development," the bank said.
The business climate remained worst in Hungary because of a
more muted assessment of the economy at present, while business
expectations were fairly steady from last autumn, the survey
showed.
Despite the subprime crisis in the United States, business
in the property sector in central and east Europe was
outstanding, with a better rating than last time and dynamic
development expected, the statement said.
In the central and east European financial sector, dominated
by west European banks and insurance companies, the business
climate was bleaker, with banks significantly reducing their
business expectations.
"This may be connected with growing uncertainty in
connection with the global financial crisis," the statement
said.
** FOR TABLE GIVING SURVEY DATA, CLICK ON []
NOTE. Distributed exclusively on Reuters, the Reuters & OeKB
Central European Business Climate Index is based on quarterly
surveys of 400 international companies with regional
headquarters in Austria, which manage 1,400 affiliate companies
in 19 countries in central and eastern Europe.
(Editing by David Christian-Edwards)
