Business expectations improved slightly in February, but remained below neutral

Business improved its assessments of its own economic activity in February, although it left them restrained, below neutral.

This is evidenced by the business activity expectations index (BAEI), which the National Bank calculates monthly, with the exception of a forced break in March-May 2022, Ukrainian News Agency reports.

The drivers of the positive impact on the expectations of enterprises of all sectors were the revival of domestic demand, increased production, and an increase in the supply of goods.

At the same time, the continued shelling of critical infrastructure, increased business costs for labor, heating, and electricity in the winter, labor shortages, and inflationary processes remained restraining factors.

In February 2025, BAEI was 46.9 compared to 41.0 in January 2025 and 47.5 in February 2024.

Industrial enterprises assessed the results of their current activities most optimistically due to the revival of consumer demand and increased production: the sectoral index in February crossed the neutral level and amounted to 50.2 (in January 2025 - 42.0, in February 2024 - 48.3).

Respondents expected an increase in the volume of manufactured products, new orders for products, including export ones, and also softened their restrained assessments of the volume of work in progress, finished product residues, and inventories of raw materials and materials.

Trade enterprises significantly improved their assessments of their business activity due to the revival of domestic demand and sufficient supply of goods: the sectoral index in February was 49.2 (in January 2025 - 40.0, in February 2024 - 50.1).

Trading companies increased their estimates of the volume of trade turnover, and, unlike the previous two months, were optimistic about the balance of goods for sale and the volume of their purchases.

Respondents, as before, expected a decrease in trade margins.

Construction companies significantly softened, but maintained restrained assessments of current economic results, given the seasonality of construction work, a significant cooling and labor shortage: the sectoral index in February was 44.7 compared to 37.2 in January 2025 and 43.7 in February 2024.

Unlike the previous three months, builders expected an increase in the volume of purchases of both raw materials and materials and contractor services.

At the same time, expectations for the volume of construction and the volume of new orders improved.

On the other hand, negative assessments of the availability of contractors and the cost of their services remained.

Service sector enterprises improved their expectations somewhat, but assessed their economic prospects the most restrainedly among all sectors, given the shortage of qualified personnel, as well as the increase in business expenses for labor, heating and electricity in the winter period: the sectoral index was 42.2 in February (in January 2025 - 41.1, in February 2024 - 45.3).

Respondents assessed the volumes of services provided, new orders for services and services in the process of implementation better than a month ago.

Enterprises of all sectors involved in the survey expected a more moderate increase in prices / tariffs for their own products / services against the background of a slowdown in the growth rate of purchase prices.

The situation on the labor market eased somewhat.

Respondents from most surveyed sectors expected a slowdown in the pace of staff reductions, only representatives of the service sector were set for their slight acceleration.

The monthly survey of enterprises was conducted from February 4 to 21, 2025. 521 enterprises participated in the survey.

Among the surveyed enterprises, 42.8% were industrial companies, 27.4% were service companies, 24.8% were trade companies, 5.0% were construction companies; 29.0% of respondents were large enterprises, 26.3% were medium-sized enterprises, and 44.7% were small.

32.8% of surveyed enterprises carry out export and import operations, 9.2% were only export operations, 17.7% were only import operations, and 40.3% were not engaged in foreign economic operations.

As Ukrainian News Agency earlier reported, the survey results reflect only the opinions of respondents - heads of enterprises, and not the assessments of the National Bank of Ukraine.

The business activity expectations index (BAEI) is a tool for operational assessment and tracking of economic development trends. The index is calculated based on surveys of Ukrainian enterprises in the real sector of the economy regarding changes in their performance indicators compared to the previous month.

Based on the respondents' answers, monthly business activity expectations indices are calculated - sectoral (for each sector of the economy) and composite, which characterizes the country's economic development for the month.

An index value of 50 is neutral.

Expectations are positive if the index value exceeds the neutral level.