* Business climate falls to -15 in April from -10 in January
* Sentiment decline worsens, although pace of downturn slows
* Hungary, Ukraine fall steeply; Poland, Czechs less so
* Overall business expectations still in red, but improve
By Sylvia Westall
VIENNA, May 12 (Reuters) - Business sentiment worsened among
companies operating in central and Eastern Europe in the three
months to April, although the pace of the fall slowed due to
resilience in countries like Poland and the Czech Republic.
The Thomson Reuters & OeKB Central and Eastern European
Business Climate index <REUTERSOEKB> showed drops in business
climate in every country in the region, with Ukraine, Hungary,
Bulgaria and Russia suffering most. []
The survey as a whole fell to minus 15 in April, from minus
10 in January.
It was dragged down by a steep fall in companies'
assessments of their current business situation, but the
category of business expectations, while still negative,
improved slightly.
The survey also showed companies' economic outlook actually
improved slightly, but was still at an eye-popping negative 56,
from negative 59 the previous quarter.
When the index falls below zero, it shows corporate morale
is negative. The business sentiment index plunged 39 points and
turned negative for the first time in January, so the relatively
light fall this time showed some fledgling signs for optimism.
"But this glimmer of hope cannot be interpreted as an
economic turnaround in Central and Eastern Europe," said
Austrian export financing bank Oesterreichische Kontrollbank
(OeKB), which compiles the index.
The poll was taken among 400 international firms managing
1,400 companies in emerging Europe as the financial crisis kept
its hold on the region, although capital markets have clawed
back after taking a thrashing at the start of the year.
UKRAINE, HUNGARY, BULGARIA WORST
The survey showed the business climate was the darkest in
Hungary, a country relying on rescue aid from the International
Monetary Fund, the EU and the World Bank, with a score of
negative 32.
It and Bulgaria were the most pessimistic looking forward,
even though Hungary's forint reached a four-month high last week
after hitting an all-time low in February.
Ukraine scored negative 31 in business climate, better than
the previous quarter although still deep in the red. Direct
investors there were also less pessimistic than in January, but
their reading improved only to minus 62, from minus 77.
"This could suggest that the Ukrainian economy's tailspin is
slowing," the survey said.
Overall business expectations were still well below zero at
minus 23, but an improvement over the previous figure of
negative 32. Businesses in Ukraine and Russia were less
pessimistic about the next six months than they were in January.
And in Poland, the Czech Republic, Slovakia and Slovenia,
the picture was brighter. They all scored zero or positive
figures for the "current business situation" category, versus
negative figures for all the other countries.
"Despite a reduced dynamic, business there is still going
well, and (businesses) are less sceptical about the prospects
for growth compared to January 2009," the OeKB said.
In industry, business climate was especially poor in the
transport, manufacturing and real estate sectors, motors for the
emerging boom over the last few years.
Investment was still falling across the region, but also at
a slower rate, the survey showed, with some of the poorest
figures for Hungary, Slovakia, Romania and Ukraine.
The quarterly survey was first published in January 2007.
NOTE - Distributed exclusively on the Reuters System, the
Thomson 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.
(Reporting by Sylvia Westall; Editing by Andy Bruce)
