In February, companies significantly softened their negative expectations for their economic performance. Economic activity is gradually reviving across all sectors, apart from the construction sector. The revival of companies is being held back the most by power shortages, higher production costs because of purchases of uninterruptible power supplies and fuel, and depressed consumer demand. 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 February 2023, the BAEI was 45.0, up from 37.5 in January 2023.
The gradual revival of power supply and purchases of uninterruptible power supplies softened the pessimistic expectations of industrial companies in February, as the sector’s DI moved to 47.2, up from 40.6 in January 2023. Respondents declared intentions to step up production (for the first time since October 2022), while also expecting an increase in the number of new export orders for products (for the first time since February 2022). While remaining negative, respondents’ expectations for the number of new orders for products improved noticeably.
The gradual adaptation to power outages, reestablished supply chains and seasonal factor significantly softened trading companies’ negative expectations for their economic performance in February, the sector’s DI being 47.0, up from 33.9 in January. Companies markedly improved their views about their trade turnover, purchases of goods for sale, and inventories/stocks of goods for sale. At the same time, companies reported weaker intentions to cut their trade margins.
Although softening their negative expectations somewhat, services companies continued to report a gloomy economic outlook because of a decline in people’ purchasing power, higher tariffs and logistical hurdles, the sector’s DI being 43.2 in February, up from 37.2 in January. Respondents significantly softened their negative expectations for the amount of services provided, the number of new orders, and the amount of services that are being provided.
Construction companies reported the most guarded views about their economic performance on the back of seasonal factor, consumers’ weak purchasing power and power outages, the sector’s DI being 33.5, down from 34.5 in January. Respondents worsened their negative expectations for the amount of construction work done, while also expecting falls in the number of new orders and purchases of raw materials and supplies.
Most polled companies said they expected that purchase and contractor prices would grow at a slower pace. They also declared weaker intentions to raise their selling prices.
Respondents across all surveyed sectors reported intentions to reduce their workforces.
This survey was carried out from 2 February through 21 February 2023. A total of 458 companies were polled. Of the companies polled, 46.7% are industrial companies, 27.9% services companies, 20.7% trading companies, and 4.6% construction companies; 32.8% of the respondents are large companies, 29.9% medium companies, and 37.3% small companies.
Out of the surveyed companies, 33.0% are both exporters and importers, 10.0% are exporters only, 15.5% are importers only, and 41.5% 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 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 February 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 survey (for March) will be published on the first business day of April 2023.