Businesses expect business activity to grow in the next 12 months for the first time since the start of the full-scale war: the business expectations index (BII) rose to 104.5% in the second quarter from 91.2% in the first quarter, the National Bank of Ukraine (NBU) said.
“Against the backdrop of the restoration of the energy system, gradual revival of domestic demand and strengthening of the hryvnia, respondents expect growth in the production of goods and services, and are positive about the development of their own enterprises. At the same time, inflation and exchange rate expectations have improved,” the NBU said in a press release on Monday.
It specified that the improvement of assessments occurred at enterprises of all types of economic activities (VED), as well as for all components of the index.
In particular, business forecasts a rapid growth in the production of goods and services in Ukraine in the coming year: the balance of responses amounted to 17.3% against “minus” 16.7% in the first quarter. Growth is expected by enterprises of all areas and types of economic activity, sizes by number of employees and most areas.
Inflation expectations continued to improve: in the second quarter of 2023, expected annual inflation amounted to 15.7%, compared to 20.7% in the previous quarter. According to the survey, 46.6% of businesses surveyed believe that inflation, which fell to 12.8% at the end of June, will not exceed 15.3% in the next 12 months. According to 88.4% of respondents, military actions remain the most significant pro-inflationary factor.
In addition, the National Bank pointed out that the influence of the “exchange rate factor” and “production costs” has somewhat weakened. The new average value of the exchange rate, which respondents expect in 12 months, is UAH 40.43/$1 against UAH 42.18/$1 a quarter earlier. Moreover, the share of respondents expecting the hryvnia exchange rate to remain at UAH 40.00/$1 in the next year increased from 19.7% to 44.3%.
At the same time, the respondents’ assessment of their own current financial and economic situation, although improved, remains negative: the balance of answers amounted to “minus” 11.1% compared to “minus” 16.9% in the first quarter. The situation worsened at construction enterprises, no improvement was reported by energy and water supply enterprises, and a slight improvement was reported by the extractive industry.
However, for the first time in five quarters, the expectations of enterprises regarding the dynamics of their financial and economic condition became positive: the balance of responses became positive – 9.6% against “minus” 2.5% in the first quarter. Improvement is expected by enterprises of all areas of activity and size in terms of the number of employees, most areas and types of activities, the NBU said.
It added that the survey participants have significantly strengthened expectations of increased sales of products, including in the foreign market: the respective balances of responses rose to 14.5% and 10.9% from 2.8% and 2.0% in the first quarter.
Respondents of all types of economic activities expect growth in total sales volumes, but most of all – in construction, processing industry and trade (balance of answers 30.0%, 21.6% and 21.0%, respectively), the National Bank said.
The enterprises of Sumy, Kirovograd and Odessa regions expect a decrease in production, while in Rivne, Ternopil and Khmelnitsky regions the estimates remained the same.
According to its data, against the background of weakening expectations of enterprises regarding the need for borrowed funds in the near future, the share of respondents planning to take bank loans decreased to 30.0% from 35.4% in the first. As before, enterprises that plan to take loans prefer loans in the national currency – 79.2% against 79.7% a quarter earlier.
High interest rates remain a significant obstacle to attracting new loans – 49.7% of responses. At the same time, the influence of the factor “availability of other sources of financing” increased by 5.5 percentage points to 42.0%. The share of companies planning to raise funds abroad remained almost unchanged at 7.3% compared to 7.4% in the previous quarter.
The National Bank noted that for the first time in five quarters, companies provided positive estimates of changes in the level of investment expenditures on machinery, equipment and inventory: the balance of responses improved to 4.5% from “minus” 10.3% in the first quarter. At the same time, pessimistic assessments regarding investment expenditures on construction works significantly weakened: the balance of responses rose to “minus” 2.3% from “minus” 17.8% in the first quarter.
It is indicated that the expectations of enterprises attracting foreign investments with regard to their increase in the nearest year continued to improve: the balance of answers reached 15.3% from 11.0% in the first quarter. The highest expectations are among enterprises of transportation and communications, as well as construction. The share of respondents who plan to attract foreign investment in the next 12 months now stands at 23.1%, up from 21.3% a quarter earlier.
Respondents significantly weakened their forecasts for the reduction of the number of employees at their enterprises in the coming year: the balance of responses improved to “minus” 3.8% from “minus” 16.4% in the first quarter. Respondents of construction and trade enterprises now expect an increase in the number of employees, while negative assessments still prevail in the sphere of transportation and communications, processing industry.
As noted by the National Bank, the survey participants expect an increase in future labor costs per employee: the balance of responses rose to 44.6% from 35.3% in the first quarter.
It is specified that the quarterly survey was conducted in May this year, it was attended by 660 enterprises from 21 regions of the country. Among the respondents 20.9% – wholesale and retail trade companies, 18.2% – processing industry, 13.9% – agriculture, 13?8% – transportation and communications, 7?3% – mining, 5.2% – energy and water supply, 3.0% – construction, 17.7% – others; 32.4% of respondents – large enterprises, 37.4% – medium, 30.2% – small.
IDO – aggregate indicator of expected development of enterprises in the next 12 months. It is calculated based on the results of surveys of enterprises as the arithmetic mean of balances of answers regarding financial and economic condition of enterprises, total sales of own production, investment expenditures on construction works, investment expenditures on machinery, equipment and inventory, number of employees. The index value over 100 means the advantage of positive economic sentiments in the society, below 100 – negative economic sentiments.
LLC “Cardboard and Paper Company” (Lviv), a major Ukrainian manufacturer of cardboard sleeves and sanitary products, in January-June 2023 increased its output by 27.4% to UAH 638.79 mln. in comparison with the same period of 2022.
According to the statistical data of UkrPapir Association provided to Interfax-Ukraine, in physical terms the company increased the output of cardboard products by 2.3% – up to 13.1 thousand tons, paper-base for sanitary-hygienic products by 4.2% – up to 3.6 thousand tons. At the same time, the output of toilet paper in rolls increased by 35.3%, amounting to 2.8 million pieces.
Meanwhile, in June, the company reduced the output of paper and cardboard by almost 16% compared to the same month last year – to 2.53 thousand tons, which is also 29.5% less than in May this year.
“Cardboard and paper company” produces products and semi-finished products from waste paperboard (cardboard sheets, corners, sleeves), pulp and recycled waste paper (toilet paper, towels, napkins TM Papero). The company supplies its products to EU countries, among others.
Among its customers are Biosphere, Arterium, Nestle, Hlebprom, and Yarich.
As reported, in 2022, the factory, without suspending work during the year, increased the volume of marketable products by 51.5% compared to 2021 – up to 1 billion 186 million UAH. Net profit tripled to UAH 263.7 mln.
Number of unemployed people registered in public employment service as of 01.05.2023 (in thousands)
Source: Open4Business.com.ua and experts.news
Kokhavyn paper mill (KBF, Lviv region), which produces sanitary and hygienic paper products (TM “Kokhavynka”), in January-June 2023 increased production by 30.3% compared to the first half of 2022 – up to UAH 562.76 million, according to statistics of the association “UkrPapir”.
According to the data provided to the agency “Interfax-Ukraine”, thus, the factory maintains the growth of this indicator more than 30% to the same period last year (at the end of five months it was 32.4%).
In physical terms, production of paper-base for sanitary-hygienic products increased by 2.7% – up to 20.82 thousand tons. Including in June, its output decreased by 4% against June-2022 – to 3.4 thousand tons.
The output of toilet paper in rolls in the first half of the year increased by 3.7% to 67.15 mln pieces. KBF retains the second place in its output after Kiev Paper Mill (120.78 mln pieces).
Kokhava Paper Mill, which has been operating since 1939, produces base paper for sanitary and hygienic goods, as well as toilet paper and paper towels.
The capacity of paper machines is 19 thousand tons per year, processing equipment – 90 million rolls per year.
The factory practically did not stop production since the beginning of Russia’s full-scale aggression in Ukraine.
As reported, KBF in 2023 produced UAH 975.3 million – 44.8% more than a year earlier. Net profit decreased by 12.7% to UAH 52.4m, while revenue increased by 46.5% to UAH 978.9m.
The volume of marketable output of Kyiv Cardboard and Paper Mill (Kyiv KBC, Obukhiv, Kyiv region), the leader of the Ukrainian industry by this indicator, amounted to UAH 3 billion 673.5 million in January-June 2023, which is 13.2% more than in the same period of 2022.
According to the statistics of the UkrPapir association provided to Interfax-Ukraine, in physical terms, the mill’s production of corrugated boxes increased by 30.4% to 108.24 million square meters. Cardboard output increased by 16.5% to 81.58 thousand tons, due to a 27.2% increase in production of containerboard to 66.91 thousand tons, while boxboard output decreased by almost 16% to 14.67 thousand tons.
On its Facebook page, the mill also reported that the installation of an automated Versor machine for gluing silicone and tear-off tape to produce a new type of product has been completed at the corrugated packaging production facility. Installation of folding and gluing line equipment is underway to expand production capabilities.
At the same time, according to “UkrPapir”, the production of base paper for sanitary-hygienic products, keeps negative dynamics: in January-June it decreased by 30.5%, to 21.08 thousand tons, while the production of toilet paper in rolls decreased by 29%, to 120.08 million pieces.
Despite the decline in toilet paper production, the mill maintains its leadership in its output in Ukraine. In general, for the first half of the year the main enterprises of the industry in Ukraine produced more than 289 million rolls (6% less).
As previously reported, the mill earlier noted that the market of sanitary-hygienic products in Ukraine has decreased by 18-35%, taking into account the general state of the economy, population reduction.
According to the data of the profile association, received from the main industry enterprises, in January-June 2023 in Ukraine recorded an increase in production of paper and cardboard by 9.8% (260.55 thousand tons), as well as by 18.3% – cardboard boxes (239.31 million square meters).
Kiev KBC is one of the largest enterprises in Europe for the production of cardboard and paper products with a staff of more than 2.5 thousand people.
As reported, in 2022 the mill produced UAH 7 bln 432 mln – 3.5% less than in 2021.
The Eastern Interregional Main Department of the State Service of Ukraine for Food Safety and Consumer Protection has announced the introduction of restrictions on imports of hatching eggs, poultry and poultry products from the Republic of Poland to Ukraine due to the registration of Newcastle disease in the country, the press service of the agency said.
According to the order of the Chief State Veterinary Inspector of Ukraine dated July 13, 2023, the ban does not apply to products that have been treated by a method that guarantees the destruction of the causative agent of this disease according to the requirements for the import (transfer) to the customs territory of Ukraine of food products of animal origin, feed, hay, straw, as well as by-products of animal origin and products of their processing, processing, approved by the order of the Ministry of Agrarian Policy and Food № 553 of November 16, 2018 year
Newcastle disease is known as pseudoplague of birds, or Asian plague – a contagious and fatal viral disease affecting all types of birds (chickens, pigeons, turkey, etc.). One of the most contagious poultry diseases in the world, caused by a virus of the Paramyxoviridae family, in which many birds die without showing any symptoms. Pseudorabies plague can cause death even in vaccinated poultry.
According to Polish media reports, the disease was detected for the first time in 50 years at a poultry farm in Bialystok district, where 43.41 thousand chickens are kept for slaughter.
