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June BOS shows BAEI at its highest level since October 2019

June BOS shows BAEI at its highest level since October 2019

Businesses upgraded their expectations for their June performance and future prospects on the back of the continuing quarantine restrictions. This is evidenced by the business activity expectations index (BAEI), which the NBU calculates on a monthly basis. The index moved up from 50.5 in May to 51.6 in June 2021 – the highest figure since October 2019.

In June, companies across most of the surveyed sectors reported optimistic expectations of their business performance – the indices of the construction, industrial and services sectors moved above their neutral levels. Meanwhile, companies in the trade sector have reported pessimistic expectations for three months running.

Industrial companies upgraded their optimistic expectations of their business performance amid benign external and internal environments – the sector’s index was 52.5 in June, up from 50.8 in May. Respondents reported much firmer expectations for the amount of manufactured goods, while also remaining upbeat about an increase in the number of new orders, including new export orders.

Service companies also improved their expectations of their business performance, with the sector’s index moving to 52.3 in June, up from 50.7 in May. Respondents expected an improvement in all performance indicators, expecting most strongly an increase in the amount of services that have been provided, and the services currently being provided.

Residential housing and non-residential facility construction companies upgraded their performance expectations most of all. The sector’s DI moved up from 49.4 in May to 58.1 in June – the highest figure among the sectors. Respondents expressed strong expectations for the amount of construction work done and the number of new orders, while also reporting intentions to hire more staff for the first time since September 2019.

In contrast, trading companies were downbeat about their business performance – their DI dropped to 48.2 in June, down from 49.9 in May, remaining below the neutral level for three months in a row. Respondents reported dimmer expectations about all performance indicators, such as trade turnover, goods purchased for sale, and staff numbers. Most companies in the sector expected a further decrease in their trade margins.

Companies across all sectors expect a rise in their selling prices on the back of continued increases in raw material and higher purchase and supplier prices.

Staff expectations remain guarded – companies across all sectors, apart from the construction sector, still report no intentions to expand their workforces.

Background information

This survey was carried out from 3 June through 22 June 2021. A total of 316 companies were polled. Of the companies polled, 42.1% are industrial companies, 28.8% companies in the services sector, 24.4% trading companies, and 4.7% construction companies; 36.1% of the respondents are large companies, 32.0% medium companies, and 32.0% small companies.

Of the companies surveyed, 39.2% are both exporters and importers, 9.2% are exporters only, 15.5% are importers only, and 36.1% 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 June 2021 survey in the Monthly Surveys of Companies Subsection of the Publications Section.

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



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