For the first time since beginning of war, business has optimistically assessed prospects of its economic development - survey of companies in Q2

Businesses, despite the active hostilities, expect an increase in business activity in the next 12 months for the first time since the beginning of a full-scale war.

This is stated in the message of the NBU, Ukrainian News Agency reports.

Against the background of the restoration of the energy system, the gradual revival of domestic demand and the strengthening of the hryvnia exchange rate, the respondents expect an increase in the volume of production of goods and services, and are also positive about the development of their own enterprises.

At the same time, inflation and exchange rate expectations improved.

The business activity expectations index (BAEI) increased to 104.5% compared to 91.2% in the first quarter of 2023.

The improvement of assessments took place in enterprises of all types of economic activity, as well as in all components of the index.

Business predicts a rapid increase in the volume of production of goods and services in Ukraine in the next 12 months: the balance of responses was 17.3% compared to "minus" 16.7% in the first quarter.

Growth is expected by enterprises of all directions and types of economic activity, sizes by the number of employees and most regions.

Inflationary expectations continued to improve: in the second quarter of 2023, the expected annual inflation was 15.7% compared to 20.7% in the previous quarter. 46.6% of surveyed enterprises believe that inflation in the next 12 months will not exceed 15.3%.

According to 88.4% of respondents, the most significant pro-inflationary factor remains military actions.

Instead, the influence of the "exchange rate factor" and "production costs" weakened somewhat.

Expectations regarding the level of devaluation of the national currency continued to weaken: the average value of the exchange rate, which respondents expect in 12 months, is 40.43 UAH/USD (in the previous quarter - 42.18 UAH/USD).

44.3% of respondents (compared to 19.7% in the first quarter) expect that the hryvnia exchange rate will not exceed 40.00 UAH/USD in the next 12 months.

Despite the softening of respondents' assessments of the current financial and economic condition of their own enterprises for the fourth quarter in a row, the overall assessment remains negative: the balance of responses was "minus" 11.1% compared to "minus" 16.9% in the first quarter.

At the same time, for the first time in five quarters, respondents' expectations regarding changes in the financial and economic condition of enterprises are positive: the balance of responses is 9.6% (in the first quarter - "minus" 2.5%).

Improvements are expected by enterprises of all areas of activity and size in terms of the number of employees, the vast majority of areas and types of activity.

Survey participants significantly increased their expectations regarding the increase in product sales, including on the foreign market: the balance of responses was 14.5% and 10.9%, respectively (in the first quarter - 2.8% and 2.0%, respectively).

The respondents of all foreign trade expect an increase in the total volume of product sales, the most - construction, processing industry and trade (the balance of answers is 30.0%, 21.6% and 21.0%, respectively).

For the first time in five quarters, enterprises provided positive estimates regarding the change in the level of investment expenditures on machinery, equipment and inventory: the balance of responses was 4.5% (in the first quarter - "minus" 10.3%) and significantly weakened pessimistic estimates regarding investment expenditures on construction works: the balance of answers "minus" 2.3% (in the first quarter - "minus" 17.8%).

The quarterly survey was conducted from May 2 to May 31, 2023.

660 enterprises from 21 regions of the country participated in the survey (excluding the temporarily occupied territory of the Autonomous Republic of Crimea, as well as the Donetsk, Luhansk and Kherson Regions).

Among the surveyed enterprises, 20.9% are wholesale and retail trade companies, 18.2% are processing industry, 13.9% are agriculture, 13.8% are transport and communications, 7.3% are mining industry, 5.2% are energy and water supply, 3.0% are construction, 17.7% - others; 32.4% of respondents are large enterprises, 37.4% are medium-sized enterprises, and 30.2% are small enterprises. The results of the surveys reflect only the opinion of the respondents - managers of enterprises, and not the assessments of the National Bank of Ukraine.

As Ukrainian News Agency earlier reported, the business activity expectations index is an aggregate indicator of the expected development of enterprises in the next 12 months.

It is calculated based on the results of surveys of enterprises, as the arithmetic mean value of the balances of answers regarding the financial and economic status of enterprises, the total volume of sales of products of own production, investment expenditures for construction works, investment expenditures for machines, equipment and inventory, and the number of employees.

The value of the index above 100 means the predominance of positive economic sentiments in the society, below 100 - negative economic sentiments.