During the period spanning May 14 through June 6, 2014, the National Bank of Ukraine conducted a regular quarterly survey of top managers of Ukrainian enterprises regarding their assessment of current and future business activity. Its findings are presented in the report “Business Outlook Survey” published on the NBU’s official website.
In total, 1, 115 enterprises from 24 regions of Ukraine (excluding the temporarily occupied territory of the Autonomous Republic of Crimea and the city of Sevastopol), representing the economy in terms of main types of activity, patterns of ownership, size and staff number, were polled.
These results only reflect opinions of the respondents, heads/managers of Ukrainian enterprises, which were polled, and shall not be considered as NBU forecasts or assessments.
Business surveys conducted in the second quarter of 2014 coincided with a period of uncertainty about the country’s political and economic prospects, instability in the east of the country, and tense relations with the Russian Federation, that caused worsening of respondents expectations regarding the macroeconomic situation as well as development prospects of their enterprises.
At the same time, survey findings suggest that some positive trends have emerged. The respondents have become more confident about stability of the hryvnia exchange rate. 31.4% of the respondents versus 8.3% in the previous quarter expect that the hryvnia exchange rate will remain unchanged over the next 12 months.
In the second quarter of 2014, there was a rise in the percentage of respondents that expect the production of goods and services to increase in the next 12 months. As a result, the negative balance of expectations decreased to (-26.2%) compared with (-34.9%) in the previous quarter. The residents from all types of economic activities have improved their expectations.
Overall, the respondents are optimistic about their enterprises' development prospects for the next 12 months. They expect the financial and economic standing of enterprises to improve. The production sales and the external market sales are forecast to increase. The respondents continue to give positive assessment to investments in equipment. However, the respondents expect investments in construction and number of employed to decrease, pushing the Business Outlook Index down to 101.5% (104.2% in the first quarter of 2014).
The most optimistic assessments have been given by large enterprises, agricultural and construction enterprisers, and importers.
According to the survey, the respondents expect their borrowing needs to increase over the next three months. The largest percentage of respondents that intend to take out loans are manufacturing enterprises and agricultural enterprises. The percentage of respondents planning to take hryvnia loans remains the largest – 86.2%
The business outlook index is an aggregate indicator of expected enterprise development for the next 12 months. It is calculated on the basis of the balance of respondents' responses in relation to changes in the financial and economic standing of enterprises and future economic activity.