The rolling blackouts and deteriorating household income during the first quarter of 2023 knocked out business confidence in the manufacturing and retail sectors. Although this was expected given the severity of power outages and the associated drop-off in business activity, the result is nonetheless disappointing. The business mood certainly remains gloomy according to the RMB/BER Business Confidence Index for the first quarter of 2023, declining from 38 in the fourth quarter to 36.
The first quarter survey was conducted between 8 and 27 February, and covered 1 050 senior executives in the building, manufacturing, retail, wholesale and motor trade sectors. “Fixed investment to expand existing production capacity also suffered as demand weakened and capital expenditure budgets were increasingly absorbed by alternative energy generation measures.”
This fall in business confidence already confirms the view of economists that the gross domestic product will fail to grow in the first quarter of the year due to rolling blackouts.
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