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October BOS shows that businesses downgraded their optimistic views for their performance outlook

October BOS shows that businesses downgraded their optimistic views for their performance outlook

In October, businesses downgraded their positive views about their economic outlook. This is evidenced by the business activity expectations index (BAEI), which the NBU calculates on a monthly basis. In October 2021, the index was 51.4, down from 53.1 in September. While robust consumer demand and investment activity continued to have a positive effect on respondents’ expectations, higher energy prices, an increase in COVID-19 cases, and stricter quarantine restrictions imposed in Ukraine and globally weakened companies’ positive views.

Trading companies continued to express the most optimistic views about their performance outlook, as the sector’s index moved to 52.2 in October, down from 56.1 in September. Respondents somewhat downgraded their positive expectations of trade turnover and the amount of goods purchased for sale.

Industrial companies have been upbeat about their economic performance outlook for six months running, the sector’s DI being 51.1 in October, down from 52.8 in September. Compared to the previous month, respondents reported more guarded expectations of an increase in the amount of manufactured goods and the number of new orders for products, including export orders. 

Services companies also remained upbeat about their performance outlook, the sector’s index being 51.3 in October, down from 51.8 in September. Respondents continued to expect an increase in the amount of services provided, the number of new orders, and the amount of services that are being provided. 

Construction companies had the most restrained expectations of their performance outlook, the sector’s DI being 50.2 in October, down from 51.6 in September. Construction companies upgraded their expectations of construction work done and the number of new orders. Meanwhile, with very strong expectations of a rise in supplier prices and the cost of contractor services, respondents reported more restrained intentions to purchase more raw materials and supplies.

Companies across all sectors reported intentions to raise their selling prices further amid higher industrial inflation and, consequently, strong expectations of a rise in raw material and supplies prices.

Employment expectations were divergent: trading and services companies said they intended to hire more staff, while industrial and construction companies have reported intentions to cut their workforces for two months running.

Background information

This survey was carried out from 4 October through 23 October 2021. A total of 341 companies were polled. Of the companies polled, 44.9% are industrial companies, 30.2% companies in the services sector, 21.1% trading companies, and 3.8% construction companies; 35.5% of the respondents are large companies, 29.6% medium companies, and 34.9% small companies. 

Of the companies surveyed, 38.1% are both exporters and importers, 10.3% are exporters only, 16.1% are importers only, and 35.5% are neither exporters nor importers.

This survey only reflects the opinions of the respondents (top-managers of Ukrainian companies), and does not represent the NBU’s forecasts or assessments.

The 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 October 2021 survey in the Monthly Surveys of Companies Subsection of the Publications Section on the NBU’s official website. 

The NBU has started posting monthly survey results in the open data format.

The results of the next survey (for November) will be published on the first business day of December 2021.


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