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July BOS shows that companies remain upbeat about their current and future business activity

July BOS shows that companies remain upbeat about their current and future business activity

In July, businesses continued to report upbeat expectations about their performance and future prospects even as quarantine restrictions remain in place. This is evidenced by the business activity expectations index (BAEI), which the NBU calculates on a monthly basis. In July 2021, the index was 50.8, down from 51.6 in June. A rebound in investment activity, stronger consumer demand, a benign external environment, eased quarantine restrictions and the faster pace of the vaccination campaign positively impacted expectations across all sectors of the economy.

Construction companies have been reporting the most optimistic expectations for their economic performance for two months running, on the back of a seasonal revival in road and highway construction and more robust investment demand for residential housing and non-residential facilities. The sector’s index was 55.6 in July, down from 58.1 in June. Respondents continued to express strong expectations about the amount of construction work done and the number of new orders, while also significantly improving their expectations of their staff numbers.

Industrial companies have been reporting upbeat expectations of their economic performance for three months running, the sector’s index was 51.9 in July, down from 52.5 in June. Respondents expected an increase in the amount of manufactured goods and the number of new orders for products, including export orders. Expectations about stocks of raw materials and supplies became dimmer.

For performance in July, services companies slightly downgraded their optimistic expectations, the DI being 50.1, compared to 52.3 in June. Respondents expressed more guarded expectations about the amount of services provided, the number of new orders, and the amount of services that are being provided. For the first time since September 2020, respondents said they planned to hire more staff.

Although improving on the previous month, trading companies’ expectations of their economic performance have not reached the neutral level, the DI being 49.7 in July, compared to 48.2 in June. Respondents expected an increase in trade turnover and the amount of goods purchased for sale.

Companies across all sectors reported intentions to raise their selling prices amid strong expectations of higher raw material and supplies prices.

Whether or not respondents intended to hire more staff depended on the sector in which they were engaged: construction and services companies said they intended to hire more staff, while industrial and trading companies reported no intentions to expand their workforces.

Background information

This survey was carried out from 5 July through 23 July 2021. A total of 313 companies were polled. Of the companies polled, 41.9% are industrial companies, 31.3% companies in the services sector, 21.1% trading companies, and 5.8% construction companies; 34.5% of the respondents are large companies, 31.9% medium companies, and 33.5% small companies. 

Of the companies surveyed, 39.9% are both exporters and importers, 8.6% are exporters only, 16.0% 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 July 2021 survey in the Monthly Surveys of Companies Subsection of the Publications Section.

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


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