Regular version of site
Skip to content
Businesses continue to suffer from the war, reporting a gloomier economic outlook – business outlook survey in January

Businesses continue to suffer from the war, reporting a gloomier economic outlook – business outlook survey in January

In January, businesses continued to downgrade their expectations for their economic activity. Power shortages, destroyed companies and infrastructure, disrupted supply chains, reduced supplies of goods and services, higher production costs, and the low purchasing power of the population continue to have a significant impact on the economic activity of companies, and on their expectations. 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 January 2023, the BAEI was 37.5, down from 42.1 in December 2022.

Industrial companies reported more pessimistic expectations for their economic performance amid power shortages, rising production costs and declining demand, the sector’s DI being 40.6, down from 43.4 2022 in December. Respondents significantly worsened their expectations for the amount of manufactured goods and the number of new orders for products, including for new export orders. Companies continued to report more pessimistic views about the amount of unfinished products (unfulfilled orders).

Hostilities, higher prices for raw materials, shrinking investment and seasonal factors continued to dampen the business activity of construction companies, the sector’s DI being 34.5 in January, down from 35.6 in December. Respondents had dim expectations for construction volumes and the number of new orders, while also downgrading their expectations for purchases of raw materials and supplies.

Trading companies reported the most pessimistic performance expectations on the back of a decline in the supply of goods, the sector’s DI being 33.9 in January, down from 42.1 in December. Respondents reported much gloomier expectations for trade turnover and the amount of goods purchased for sale due to a decline in activity, which is usual for the start of the year, and the weaker purchasing power of the population. At the same time, respondents reported slightly firmer, albeit still weak, expectations for their trade margins.

Services companies reported a gloomier economic outlook on the back of destroyed infrastructure, disrupted supply chains and higher tariffs, the sector’s DI being 37.2 in January, down from 41.8 in December. Respondents expected a noticeable decrease in the amount of services provided, the number of new orders, and the amount of services that are being provided.

Most polled companies declared intentions to raise their selling prices further on the back of higher purchase and contractor prices.

Respondents across all of the surveyed sectors continued to report intentions to reduce their workforces, with construction companies declaring the strongest intentions.

Background information

This survey was carried out from 5 January through 24 January 2023. A total of 442 companies were polled. Of the companies polled, 45.2% are industrial companies, 28.3% services companies, 21.9% trading companies, and 4.5% construction companies; 31.0% of the respondents are large companies, 30.5% medium companies, and 38.5% small companies.

Out of the surveyed companies, 33.3% are both exporters and importers, 11.3% are exporters only, 14.9% are importers only, and 40.5% 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 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 January 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 February) will be published on the first business day of March 2023.


Subscribe for notifications

Subscribe to news alerts