For 2nd month in row, business negatively evaluates results of its activity

For the 2nd month in a row, the business negatively evaluated the results of its activity.

This is evidenced by the business activity expectations index (BAEI), the Ukrainian News agency reports.

In June 2024, the BAEI decreased to 43.6 from 48.0.

The further deterioration in the expectations of enterprises in all sectors was influenced, in particular, by rising business costs due to electricity shortages due to russian attacks on the power system and tariff increases, weak investment demand, as well as a significant shortage of skilled workers.

Industrial companies lowered their near-term performance estimates due to the deteriorating security situation, significant power outages and rising production costs: the sectoral index in June was 45.5 (48.8 in May).

Trade enterprises maintained negative expectations against the background of the worsening of the energy supply situation, the increase in electricity tariffs and the deterioration of exchange rate expectations: the sectoral index was 46.4 (was 47.7).

Construction companies also weakened their ratings significantly due to weak investment demand, prolonged power outages and a lack of skilled workers: the sector index was 43.0 (was 49.8).

For the second time in a row, companies in the service sector gave the most restrained assessment of their economic performance and worsened expectations about the economic outlook, given the outflow of qualified personnel, increased costs due to electricity shortages and reduced demand: the sectoral index fell to 39.7 (from 47.2).

Enterprises of industry, trade and the service sector predicted an increase in the growth rates of both purchase prices and prices/tariffs for their own products/services, while builders were set on their slight slowdown.

The situation on the labor market worsened.

Managers of enterprises in all sectors expected a reduction in the total number of employees, most significantly in the service sector.

The monthly survey of enterprises was conducted from June 4 to June 21, 2024. 445 enterprises took part in the survey.

Among the surveyed enterprises, 44.5% are industrial companies, 28.3% are service sector companies, 22.0% are trade companies, and 5.2% are construction companies; 30.3% of respondents are large enterprises, 27.6% are medium-sized enterprises, and 42.0% are small enterprises.

31.9% of surveyed enterprises carry out export and import operations, 11.0% - only export operations, 18.4% - only import operations, 38.7% - do not carry out external economic operations.

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 the Ukrainian News agency earlier reported, the monthly business activity expectations index (BAEI) is a tool for operational assessment and tracking of economic development trends. The index is calculated on the basis of surveys of Ukrainian enterprises in the real sector of the economy.

On the basis of respondents' answers, monthly business activity expectations indexes are calculated - sectoral (for each sector of the economy) and composite, which characterizes the economic development of the country for the month. The index value at 50 is neutral. Expectations are positive if the index value exceeds the neutral level.

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