The forecasts of the larger, mainly export-oriented firms in respect of business optimism, export and local order books, production volumes, profitability, employment and capital expenditure on plant and machinery are all more positive or less negative than six months earlier. The smaller export-oriented respondents registered the same forecasts except for profitability and business optimism, where the trend is in the opposite direction.

A similar distinction between larger and smaller firms can be seen among the mainly locally-oriented respondents, but this time it is the larger firms that are faring worse. The forecasts of the smaller, mainly locally-oriented firms in respect of local order books, production volumes, profitability, employment and capital expenditure on plant and machinery and on land and buildings are all more positive or less negative than six months earlier. The most notable exceptions to these trends are the negative findings in respect of export order books and business optimism.

The forecasts of the larger, mainly locally-oriented firms are practically all more negative or less positive than they were six months earlier. It is worth noting that the business optimism of the mainly locally-oriented sector for the first half of 2004 is the worst registered in this survey series since 1998. Given that more than half of this negative trend is generated by the foodstuffs sector, this trend is clearly attributable to the lack of clarity that these firms had, and to a certain extent still have to date, on their operating conditions after 1 May.

In addition to the manufacturing section of the ITS, the federation also regularly conducts a survey of its non-manufacturing membership.

As in the case of manufacturing, costs in the first half of 2004 were forecast to increase at a faster rate than that in the preceding six months. Many respondents indicated that they had lowered their prices in the second half of 2003 and they forecast that they would be increasing them in the first half of 2004.

Generally, profitability experienced a reduction in the second half of 2003 and was expected to remain negative, but to a lesser degree, in the first half of 2004.

In the case of local order books, business optimism and capital expenditure on land and building, non-manufacturing firms reported a negative situation in the first half of 2004, while forecasting a small increase in employment during the same period.