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Businesses Downgrade Their Expectations for Their Economic Performance – Business Outlook Survey in December

Businesses Downgrade Their Expectations for Their Economic Performance – Business Outlook Survey in December

In December, businesses worsened their expectations of their current and future economic performance. Uncertainty about the duration of the hostilities, risks that international aid will arrive irregularly and in insufficient amounts, rising logistics costs due to the blockade of the border, high fuel prices, narrowing investment demand, shortages of skilled workers, and weaker demand worsened the business outlook of companies across 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 December 2023, the BAEI was 45.7, down from 49.1 in November.

After reporting a positive economic outlook for nine months running, trading companies worsened their performance expectations on the back of a fall in imports of goods due to the border blockade and the weaker purchasing power of households, the sector’s index was 46.9 in December, down from 50.9 in November.

Trading companies expected a decrease in their trade turnover and the amount of goods purchased for sale, while being more optimistic about their stocks of goods for sale. Respondents expected weaker growth in the cost of goods purchased for sale, while also declaring intentions to cut their trade margins further.

Amid a decline in export and import transactions, increased logistics costs because of the border blockade and high fuel prices, industrial companies have been expecting poorer financial performance for two months running, the sector’s index was 46.9 in December, down from 49.2 in November. Respondents continued to expect an increase, albeit at a slower pace, in the amount of manufactured goods, while expecting a drop in the stocks of raw materials and supplies, and in the number of new orders for products. Respondents downgraded their views about their finished goods stocks, while also being more pessimistic about the number of new export orders for products and the amount of unfinished products.

Services companies worsened their negative expectations of their current economic performance on the back of logistical difficulties with crossing the border, high fuel prices and sluggish demand, the sector’s DI being 44.0, down from 48.4 in November. In contrast to the previous month, respondents expected a decrease in the amount of services provided, the volume of services that are being provided and a further drop in the number of new orders.

Although softening their views somewhat, construction companies have for three months in a row been the most pessimistic of all about their economic performance because of a seasonal decline in economic activity, narrowing investment demand, and shortages of skilled workers, the DI being 42.1, up from 40.6 in November. Respondents expected a further drop, albeit at a slower pace, in construction volumes and in purchases of raw materials and supplies. Construction companies also expected the number of new orders to decrease further. Respondents declared stronger negative expectations about purchases of contractor services and about an increase in the cost of these services. At the same time, companies somewhat softened their negative views about the availability of contractors

All participants, apart from industrial companies, said they expected that purchase prices would grow at a slower pace. They also declared weaker intentions to raise their selling prices.

With the seasonal decline in activity on the labor market, staff expectations varied across the sectors. Managers across most sectors continued to expect reductions in their workforces, with construction companies reporting the firmest expectations. In contrast, after reporting negative expectations for two months in a row, trading companies reported intentions to hire more staff.


This survey was carried out from 4 December through 21 December 2023. A total of 426 companies were polled. Of the companies polled, 44.6% are industrial companies, 28.9% services companies, 21.8% trading companies, and 4.7% construction companies; 34.5% of the respondents are large companies, 27.7% medium companies, and 37.8% small companies.

Out of the surveyed companies, 33.1% are both exporters and importers, 9.6% are exporters only, 16.0% are importers only, and 41.3% 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 December 2023 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 (January 2024) survey will be published on the first business day of February 2024.


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