The regular quarterly survey of enterprises' presidents/managers on their assessments of the current and future business activity, inflation and exchange rate expectations, and changes of the business environment in the country was held in November 2008. 1,256 enterprises from all regions, which represented the economy according to principal types of activity, forms of ownership, and size measured by the number of employees, were interviewed.
The main results.
The unfolding of the financial crisis and global economic recession along with complicated political events and accumulated disproportions in the economy of Ukraine led to respondents' assessment aggravation of their own development as well as of prospects of the economy at large.
According to the survey results the respondents marked down assessment of their own current financial and economic state. The balance of expectations (calculated as the difference between the percentage of positive and negative answers) appeared to be negative (-10.6%). However, percentage of the respondents that considered the position of their enterprises as satisfactory remained mainly unchanged and totalled 65.2%. The respondents noted the growth of residue of finished goods which was caused by supply augmentation (high-yielding grain crops this year) and downturn in demand for products of certain industries. The use intensity of production capacities reduced at enterprises of almost all types of economic activity.
In 2009, respondents of all types of economic activity expect the following: deterioration of the financial and economic state of enterprises (balance of expectations came to - 26.2% against 22.0% in the previous quarter); drop in sales and investment volumes, especially in the construction industry; reduction in the employment level. At the same time, the transport and telecommunications industries expect investment activity growth.
In 2009, the production expenses and sales (output) prices are expected to continue falling, which agrees with the tendency of reduction in the producer prices. The costs of raw materials and energy sources are expected to remain the key factors in the change of output price level. The same factors are likely to remain deterrents of enterprises' income increase (in opinion of 60.0% of the 2 respondents). Impact of the exchange rate on expenses and prices was intensified (45.9% against 23.5% of respondents in the 3rd quarter of the current year).
Enterprises start to feel a lack of the current assets (46.1% of answers, increase by 12.0 p.p.) and note the reduction of borrowing facilities (28.7%, increase by 13.9 p.p.). Percentage of the respondents that plan to obtain bank loans somewhat declined (by 5.0 p.p. to 58.4%). Majority of the respondents (84.6%, increase by 11.5 p.p.) plan to obtain loans in UAH as a result of strengthening of the devaluation expectations. The high level of interest rates remains the key restraining factor for utilization of the bank loan services (81.9% of the answers, increase by 2.8 p.p.).
The inflationary expectations remained rather high and for the next 12 months reached 18.6% against 15.8% in the previous quarter. Percentage of the respondents that expected a rise in prices by 20% and more also increased (by 17.9 p.p. to 44.6%). The general economic and political situations were named as the key factors of the high inflation (noted by 87.3% and 79.5% of the respondents). The respondents also showed an increased interest in the NBU activity (20.1% of the respondents had followed the NBU activity on a regular basis against 11.2% in the previous quarter).
Trend assessment of the general economic situation for the next 12 months has deteriorated. The majority of respondents (71.8%) have no expectations of economic growth in the next 12 months. Only 16.2% of the respondents expect the UAH to USD exchange rate to remain unchanged (against 46.4% in the 3rd quarter). The majority of respondents expect the UAH depreciation against both USD and EUR for the next 12 months (75.4% and 73.0% respectively).
The provided data are reflection of the respondents' views – Ukrainian businessmen as of November 2008, and do not represent NBU's forecasts and assessments.