Business has improved the assessment of its prospects to the level of December 2021 – NBU survey

The improvement of the external environment, logistics, the situation in the energy sector, and the improvement of consumer sentiments had a positive effect on business expectations in March.

This was reported by the press service of the NBU.

It is noted that in March the index of expectations of business activity (IODA) increased to 49.5 from 45.0 in February and almost reached an equilibrium level. This is the highest value since December 2021, the NBU emphasized.

“Trade enterprises provided the most optimistic assessments of the results and prospects of their activities against the background of revival of consumer sentiment, improvement of the energy supply situation and increase in the supply of goods: the sectoral index rose to 53.6 in March from 47.0 in February, crossing the neutral level for the first time since November 2021.

Respondents significantly improved their expectations regarding turnover and volume of purchases of goods for sale. At the same time, taking into account the softening of estimates regarding the purchase prices, they expected a slight decrease in the trade margin,” the report says.

In addition, the improvement of the situation in the energy sector and the external environment, as well as the improvement of supply chains, had a positive effect on the assessments of industry respondents.

According to the results of the survey, for the first time since February 2022, they expected an increase in their economic results compared to the previous month: the sectoral index crossed the neutral level in March and was 51.2 compared to 47.2 in February.

At the same time, the respondents expected an increase in the volume of manufactured products and the volume of new orders for products, including export ones.

At the same time, pessimism in estimates of volumes of unfinished production (unfulfilled orders) decreased significantly, and expectations regarding the growth of finished product balances weakened.

“Construction enterprises, taking into account the seasonal factor, significantly softened the negative assessments of their economic results: the sectoral index in March was 45.9 (in February – 33.5). Respondents expected an increase in the volume of purchases of contractor services, as well as raw materials and materials,” – added in NBU

At the same time, builders did not predict changes in the volume of construction and significantly weakened the negative estimates regarding the volume of new orders.

At the same time, service sector enterprises, despite the seasonal upturn, had the most subdued assessments of their economic prospects: the sectoral index stood at 45.7 compared to 43.2 in February.

“Respondents somewhat moderated, but maintained negative expectations regarding the volume of services provided, new orders, as well as the volume of services in the process of execution. Most of the enterprises participating in the surveys forecast a slowdown in the growth rates of purchase prices and contractor prices, as well as prices and tariffs for own products/services.

Employment estimates remain subdued. Companies of all sectors involved in the survey do not yet expect an increase in the total number of their employees. The least pessimistic assessments are in trade enterprises,” the NBU summarized.

The monthly survey of enterprises was conducted from March 6 to 24, 2023. 484 enterprises took part in the survey.

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