Business preserves positive evaluations of the results of its activities — NBU

For the second month in a row, business positively assessed the current results of its activities, despite the ongoing full-scale war. This is evidenced by the index of expected business activity (IODA), which the National Bank calculates monthly, the press service of the regulator reports.

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“The successful restoration of the energy system, the revival of domestic demand, in particular, thanks to the gradual return of Ukrainians from abroad, as well as the strengthening of the hryvnia exchange rate contributed to the respondents’ positive sentiments regarding the economic results in the near future,” the message says.

In May 2023, the IODA remained above the neutral level (50 points) and was 50.5 against 51.5 in April.

Construction enterprises

Construction enterprises significantly improved their ratings compared to other sectors and for the first time in a year and a half expected growth in their economic results, taking into account the seasonal factor, the gradual resumption of work of most domestic manufacturers of construction materials and the revival of demand: the sectoral index in May was 51.3 (44.9 in April).

Respondents expected an increase in the volume of construction and procurement of raw materials and did not forecast changes in the volume of new orders.

Builders significantly increased their expectations of growth in the purchase of contractor services and slightly improved their forecasts regarding the availability of contractors.

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Trade enterprises

Trade enterprises weakened somewhat, but kept the most optimistic estimates of the results and prospects of their activity, taking into account the revival of consumer demand and the slowdown of inflation: the sectoral index in May was 52.7 compared to 57.6 in April.

Respondents maintained high marks for turnover and volume of purchases of goods for sale. At the same time, they were set on a slower journey of goods purchased for sale, weakened their estimates of the growth of purchase prices and renewed expectations of a decrease in trade margins.

Industrial enterprises

For the third month in a row, industrial enterprises expected growth in their economic results thanks to reliable energy supply and new logistics routes: the sectoral index in May was 50.4 compared to 50.5 in April.

The respondents expected the volume of production and the volume of new orders, including export ones, to grow at a higher rate than a month ago. At the same time, the negative estimates of the volume of unfinished production (unfulfilled orders) increased somewhat.

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Enterprises of the service sector

Enterprises in the service sector are the only ones among other sectors to retain a negative assessment of their economic prospects: the sectoral index was 48.9 compared to 48.8 in April.

For the second month in a row, respondents predicted an increase in the volume of services provided, and for the first time since October 2021, they expected an increase in the volume of new orders, and gave negative estimates for the volume of services in the process of execution.

“The majority of the enterprises participating in the surveys maintained high expectations of growth in purchase prices for raw materials and suppliers’ goods, as well as tariffs for their own products/services,” the regulator noted.

Survey

The monthly survey of enterprises was conducted from May 4 to 24, 2023. 487 enterprises took part in the survey.

Among the surveyed enterprises, 45.4% are industrial companies, 29.8% are in the service sector, 20.5% are in trade, and 4.3% are in construction; 32.2% of respondents are large enterprises, 30.4% are medium-sized enterprises, and 37.4% are small enterprises.

32.2% of surveyed enterprises carry out export and import operations, 9.0% – only export operations, 17.0% – only import operations, 41.7% – do not carry out external economic operations.

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Source: Ministry of Finance

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