The Business Association of Georgia (BAG) Index reports that the trade sector expects sales growth in the second quarter.
The situation in Q1 of 2025 regarding sales was assessed almost equally positively in all sectors (23-29%). In addition, a high share of companies in the trade, services and manufacturing sectors (35-43%) report a decrease in sales in Q1 of 2025. Nevertheless, companies have positive expectations for Q2 of 2025. Among them, the most positive expectations are recorded in the trade sector.
In Q1 of 2025, compared to Q4 of 2024, the present business situation indicator worsened in the manufacturing sector by 19.5 points, in the trade sector by 15.7 points, in the service sector by 14.1 points, and in the construction sector by 1.7 points.
The indicator slightly improved in the manufacturing sector by 0.1 points. In Q4 of 2024, the business expectations indicator improved in the trade sector by 21.1 points, in the service sector by 10.8 points, and in the construction sector by 2.5. Meanwhile, expectations worsened in the manufacturing sector by 13.8 points.
It is worth noting that in Q1 of 2025, the present business situation indicator was highest in the construction sector and lowest in the trade sector. Among the sectors, the most positive business expectations were recorded in the trade sector, while the most negative expectations were observed in the construction sector.
In Q1 of 2025, the following five factors were emphasized as the most hindering for business activity: volatility of national currency exchange rate, lack of specialists, legal and administrative barriers, labor shortage, and weak demand.
According to BAG Index, the volatility of the national currency exchange rate is especially problematic in the trade sector (78%) and for small businesses (42%).
Overall, 67% of the surveyed businesses stated that their total investments had increased in 2024, compared to 2023. Meanwhile, 23% of the surveyed companies claimed their total investments were unchanged, while 10% stated their investments had decreased over the same period.
