In July, businesses were slightly more upbeat about their economic performance. At the same time, more fierce fighting, disrupted production and logistic routes, destroyed assets and infrastructure, high energy prices, and falling demand are delaying the recovery of economic activity in all sectors of the economy. This is evidenced by the business activity expectations index (BAEI), which the NBU calculates on a monthly basis, apart from the forced break in March–May. In July 2022, the index was 43.6, up from 41.3 in June.
In July, companies across all of the surveyed sectors continued to report negative expectations of their economic outlook in the near future.
Disrupted production and logistical chains, destroyed production facilities and infrastructure and the temporary occupation of some territories continued to shape the gloomy economic outlook of industrial companies in July, the sector’s DI being 43.1, compared to 43.7 in June. Respondents continued to report weak expectations for the amount of manufactured goods and the number of new orders for products, while also downgrading their expectations for the number of new export orders.
Despite favorable seasonal conditions and the government’s adoption of several resolutions to boost the operation of the construction sector, respondents downgraded their expectations of their July performance, the sector’s DI being 35.0, down from 40.1 in June. Respondents had negative expectations for construction volumes, the number of new orders, purchases of raw materials and supplies, and the availability of contractors.
In spite of difficulties, trading companies are adapting to the new conditions and upgrading expectations of their economic outlook: the sector’s DI, at 48.7, came close to the neutral level (compared to 43.4 in June). Although expecting an increase in goods turnover, respondents reported guarded expectations for the amount of goods purchased for sale. Trading companies said they intended to cut their trade margins further.
Services companies’ expectations remained negative, despite improving slightly: the sector’s index was 41.9, up from – 37.7 in June. Among other things, the companies’ negative expectations resulted from ongoing fierce fighting, damaged transport infrastructure, reduced demand and the loss of orders.
Companies across all of the surveyed sectors said they intended to raise their selling prices at a slower pace on the back of weaker growth in raw material and supplies prices.
Employment expectations remained pessimistic. Respondents across all sectors expected reductions in their workforces, with construction companies reporting the firmest expectations. That said, trading and services companies reported some increase in demand for labor.
This survey was carried out from 4 July through 22 July 2022. A total of 420 companies were polled. Of the companies polled, 45.5% are industrial companies, 28.1% services companies, 21.4% trading companies, and 5.0% construction companies; 32.4% of the respondents are large companies, 31.7% medium companies, and 36.0% small companies.
Of the companies surveyed, 34.8% are both exporters and importers, 9.8% are exporters only, 14.5% are importers only, and 41.0% are neither exporters nor importers.
The findings presented reflect only the opinions of the respondents (top managers of Ukrainian companies), and should not be considered as NBU forecasts or assessments.
The monthly business activity expectations index (BAEI) is a tool for conducting latest assessments and detecting trends in economic development. It is calculated on the basis of surveys of Ukrainian real sector companies.
Monthly business activity expectations indices are calculated on the basis of respondents’ replies. These indices are as follows: sectoral indices (for each sector of the economy) and a composite index (describes the country’s economic development over a month). A value of 50 corresponds to the neutral level. Index values above the neutral level indicate positive expectations.
Read more about the July 2022 survey in the Monthly Surveys of Companies Subsection of the Publications Section on the NBU’s official website.
The NBU started posting monthly survey results in the open data format.
The results of the next (August) survey will be published on the first business day of September 2022.