In December, business continued to weaken business activity assessments.
This is evidenced by the Business Activity Expectations Index (BAEI), which the National Bank calculates monthly, except for a forced break in March-May 2022, Ukrainian News Agency reports.
The worsening security situation, increased shelling of energy facilities and their prolonged recovery, further growth in business costs for labor, energy supply and logistics, accelerating inflation, declining investment demand, a shortage of qualified personnel, as well as seasonality restrained economic activity and negatively affected the assessments of enterprises of all sectors participating in the surveys.
In December 2024, the BAEI was 45.9 compared to 47.2 in November and was practically at the level of December 2023 (45.7).
Unlike the previous month, trade enterprises assessed the results of their business activity with restraint, given the difficult security situation and electricity shortage: the sectoral index in December was 49.9 (in November - 51.4, in December 2023 - 46.9).
Trade companies were less confident in expecting an increase in the volume of trade turnover, assessed the volume of purchases of goods for sale with restraint, and also worsened expectations regarding the balance of goods for sale.
Respondents, as before, were set on reducing the trade margin.
Industrial enterprises assessed the results of their current activities with more restraint, given the electricity shortage, lack of qualified workers, and increased production costs: the sectoral index in December was 44.6 (in November - 46.7, in December 2023 - 46.9).
Respondents weakened expectations for the volume of manufactured products, new orders for products, including export ones, as well as the volume of work in progress.
At the same time, assessments of the balance of finished products, as well as stocks of raw materials and materials deteriorated.
Service enterprises also somewhat weakened their assessments of their economic prospects against the background of significant power supply disruptions, a shortage of qualified personnel, and increased business costs: the sectoral index was 44.5 in December (in November - 44.8, in December 2023 - 44.0).
Respondents expected a further decrease in the volume of services provided, new orders for services, and services in progress.
Construction companies for the second time in a row provided the most pessimistic assessments of their current economic results, given the seasonality of construction work, as well as a decrease in investment demand: the sectoral index in December was 43.4 compared to 43.6 in November (in December 2023 - 42.1).
Builders expected a further decrease in construction volumes, new orders, and purchases of raw materials and supplies.
At the same time, expectations for the volume of purchases of contractor services improved against the background of increasing negative assessments of their availability and accelerating the growth rates of their cost.
Construction and service companies expected an increase in the growth rates of purchase prices, as well as prices / tariffs for their own products / services, while industry and trade respondents predicted their weakening.
The situation on the labor market remains difficult, although employment expectations have softened somewhat.
Respondents from all surveyed sectors were set to reduce the number of employees, while construction, trade and service enterprises expected a slowdown in the pace of staff reduction, only industrial enterprises predicted a slight acceleration.
The monthly survey of enterprises was conducted from December 4 to 23, 2024. 508 enterprises participated in the survey. Among the surveyed enterprises, 44.1% were industrial companies, 26.4% were service enterprises, 24.6% were trade enterprises, 4.9% were construction enterprises; 29.3% of respondents were large enterprises, 28.5% were medium-sized enterprises, and 42.1% were small.
33.5% of surveyed enterprises carry out export and import operations, 9.1% were only export operations, 18.7% were only import operations, and 38.8% 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 Monthly 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.
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. The index value at 50 is neutral.
Expectations are positive if the index value exceeds the neutral level.
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