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Businesses Report Negative Economic Outlook – Businesses Outlook Survey in May

Businesses Report Negative Economic Outlook – Businesses Outlook Survey in May

After reporting a positive economic outlook for two months in a row, businesses downgraded their views.

More intense hostilities and missile attacks on infrastructure, power shortages, rising production costs due to high fuel prices and growing logistics costs, weak investment demand, deteriorating exchange rate expectations, considerable shortages of qualified staff, as well as uncertainty about the further course of the war and employee mobilization conditions hampered economic activity, worsening the expectations of all of the surveyed sectors.

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 2022. In May 2024, the BAEI was 48.0, down from 52.3 in April.

Industrial companies worsened their economic outlook for the near future amid high security risks, rising production costs and power shortages, the sector’s index being 48.8 in May, down from 51.7 in April. Respondents softened their positive expectations for the amount of manufactured goods and the number of new orders for products, while also expecting a drop in the number of new export orders. Respondents were more downbeat about their finished goods stocks and the amount of unfinished products (unfulfilled orders).

Trading companies also reported dimmer performance expectations on the back of growing import prices, high fuel prices and declining demand, the sector’s index being 47.7 in May, down from 51.8 in April. Respondents expected a substantial drop in their trade turnover and the amount of goods purchased for sale, while returning to expecting a decrease in their stocks of goods for sale. Trading companies declared firmer intentions to cut their trade margins.

Construction companies were pessimistic about their economic performance despite favorable weather conditions and sustained domestic demand, the sector’s index being 49.8 in May, down from 53.4 in April. Respondents said they were less optimistic about an increase in construction volumes and the number of new orders. At the same time, construction companies expected their purchases of raw materials and supplies to remain at the previous month’s level. Respondents reported gloomier expectations about the availability of contractors, while also expecting a much smaller increase in purchases of contractor services. Respondents also said the cost of these services would remain high.

Services companies reported the gloomiest economic outlook, significantly worsening expectations of their economic performance due to shortages of qualified staff, higher logistics costs and depressed demand, the sector’s index being 47.2, down from 53.1 in April. Respondents retained their positive expectations about the amount of provided services, despite weakening them significantly. At the same time, services companies were downbeat about the number of new orders for services and the amount of services being provided.

Despite continuing to report strong expectations of a rise in purchase prices, most respondents said they intended to raise their selling prices more slowly.

Labor market conditions remained difficult. As in the previous survey, only construction companies reported intentions to expand their workforces slightly. Respondents across other sectors worsened their expectations and declared intentions to reduce their workforces further, with the strongest expectations reported by services companies.


This survey was carried out from 6 May through 23 May 2024. A total of 449 companies were polled. Of the companies polled, 44.9% are industrial companies, 29.2% services companies, 21.0% trading companies, and 5.0% construction companies; 30.8% of the respondents are large companies, 28.0% medium companies, and 41.2% small companies.

Out of the surveyed companies, 33.3% are both exporters and importers, 10.3% are exporters only, 17.3% are importers only, and 39.2% 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 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 performance 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 May 2024 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 survey (for June 2024) will be published on the first business day of July 2024.




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