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Businesses Remain Optimistic about Their Performance – August Business Outlook Survey

Businesses Remain Optimistic about Their Performance – August Business Outlook Survey

In August, businesses improved their assessments of their economic standing amid favorable external conditions, robust consumer demand, higher public expenditures on infrastructure development, and the ongoing rebound of investment activity. This is according to the business activity expectations index (BAEI), which the NBU compiles on a monthly basis. In August 2021, the BAEI was 53.4, its highest since October 2019, and up from 50.8 in July.

Industrial businesses showed the most optimism about their economic performance and prospects, with the sector’s index at 54.3 in August, up from 51.9 in July. As in previous months, respondents projected an increase in the volume of manufactured products and new orders, including exports. For the first time in a year and a half, the industry sector was upbeat about hiring.

Among all sectors, service providers showed the highest increase in optimism about their economic outlook, with the sector’s index rising to 54.1 in August from 50.1 in July. Respondents gave positive assessments of their volume of services provided and the volume of new orders and services being processed. For the second month running, businesses expected to increase their staff numbers.

For the first time since April this year, trade companies evaluated the results of their economic activity as positive. The sector’s index increased to 51.1 in August from 49.7 in July. Respondents improved their expectations about the volume of trade and purchases of goods for sale. However, despite being confident about their business activity, they did not expect an increase in the total number of employees.

Construction companies were positive about their performance for the fourth straight month. In August, the sector’s index came out at 53.0, down from 55.6 in July.  Respondents continued to rate their construction volumes and new orders as high, and were optimistic, for the third month running, about the total number of staff.

Against the backdrop of strong expectations that prices for raw materials would rise, businesses across all sectors projected higher prices for their products/services. However, as expectations of more expensive contractor services abated, construction companies were more restrained in saying that prices for their  products/services would increase.

Background information

This survey was carried out from 5 August through 25 August 2021. A total of 322 companies were polled. Of the companies polled, 42.9% were industrial companies, 29.5% companies in the services sector, 22.7% trading companies, and 5.0% construction companies; 35.7% of the respondents were large companies, 29.2% medium companies, and 35.1% small companies.

Of the companies surveyed, 39.1% were both exporters and importers, 9.6% were exporters only, 15.2% were importers only, and 36.0% were 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 August 2021 survey in the Monthly Surveys of Companies subsection of the Publications section of the NBU’s website.

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


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