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 May 2008. 1,296 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 outcome of the survey:
The respondents positively assess the current financial and economic standing of their enterprises, though the balance of their expectations (calculated as the difference between the percentage of positive and negative answers) fell by 1.9 p.p. to 5.3%. Nevertheless, for the next 12 months the financial and economic situation is expected to improve, with the expectations balance remaining at the level of the previous quarter (28.4%).
Investment activity will remain at the high level, investments in construction and equipment and instruments will increase (expectations balance came to 19.1% and 38.9%, respectively.
Expectations of an increase in employment remained high (the balance was 16.8% against 19.2% in the 1st quarter).
Prices for raw materials and supplies are still regarded to be the key factor influencing growth of prices (76.2% of respondents, growth by 1.2 p.p.). This factor along with the cost of energy sources were the main deterrents of enterprises' income increase.
The inflation expectations grew stronger. The expected average inflation for the next 12 months reached 17.1% against 15.6% in the previous quarter.
On respondents' opinion, the main driving forces of inflation remain to be the political situation (80.5% of answers) and the economic one (74.1% of answers). Assessments of the exchange rate influence on inflationary process rose (21.8% against 6.2% in the 1st quarter).
The NBU activity was traditionally not considered by the respondents as a factor of inflationary pressure (according to 92.5% of respondents).
The assessment of general economic prospects for the next 12 months kept on worsening. The balance of expectations fell by 27.4 p.p. to (-52.5%).
Appreciation of hryvnia against US dollar is expected by 36.3% of respondents against 14.2% in the 1st quarter. Accordingly, only 39.2% of the respondents expect UAH to USD exchange rate to remain unchanged versus 65.6% in the 1st quarter of 2008.
Percentage of the respondents that had an intention to take bank loans increased (by 5.2 p.p. to 63.1%), in particular the percentage of those who planned to take the next loan in UAH (by 1.8 p.p. to 78.4%).
Traditionally, the respondents name the high interest rates (76.2% answers) and excessive requirements for collateral (41.7%) as the main restraining factors for utilization of the bank loan services.
More than 80% of the respondents admitted that they followed the NBU activity, 13.1% of them – on a regular basis.
The provided data are the reflection of the respondents' views – Ukraine's enterprises as of May 2008, and do not represent the NBU's forecasts and assessments.