The Business Confidence Index (BCI), calculated by the National Bank of Ukraine (NBU) on a scale from zero to 100, rose to 50.1 points in September from 49.3 in August, the National Bank of Ukraine (NBU) said on Monday.
“In September, businesses positively assessed their current performance after two months of restrained expectations. A gradual recovery in production rates, the establishment of new supply routes, a decrease in the growth rate of raw material and energy costs, improved inflation and exchange rate expectations, and strong domestic demand led to an improvement in respondents’ expectations,” the regulator said.
In particular, in September, assessments of the economic situation slightly improved in industry, services and trade, respectively from 48.8 to 50 points, from 47.3 to 47.9 points and from 52.5 to 53.3 points.
Respondents in the industrial sector improved their assessment of their economic performance, given the gradual recovery in production, new ways of supplying products, and slowing inflation.
Enterprises expect prices for their own products to rise further (from 58.8 points in August to 61.4 points in September), while lower expectations of rising prices for raw materials and supplies (from 32.3 points to 30.9 points).
According to the central bank, respondents maintained positive expectations about the volume of manufactured products and new orders for them, as well as inventories of raw materials.
It is indicated that respondents expect new export orders for products at the level of the previous month. At the same time, negative assessments of work in progress have eased somewhat, while assessments of finished goods stocks have deteriorated.
According to the NBU, trade enterprises remain the most optimistic among other sectors: for the seventh month in a row, they have been assessing their performance positively. In particular, this is due to strong consumer sentiment, sufficient supply of goods, and slowing inflation. The sectoral index in September was 53.3, up from 52.5 in August.
It is emphasized that traders are set to further increase their turnover and the volume of goods purchased for sale. At the same time, against the backdrop of stronger forecasts of higher purchase prices, respondents softened their estimates of the growth in the value of goods purchased for sale, while maintaining positive estimates of inventories of goods for sale and weakening estimates of a decline in trade margins.
As for service companies, their assessments softened somewhat, while this is the only sector that retained negative assessments of its business activity, given the destruction of transport logistics, higher fuel prices, and weak demand. The sectoral index for services rose to 47.9 last month from 47.3 in August.
According to the central bank, unlike the previous two months, respondents expected a slight increase in the volume of services provided and mitigated negative expectations of new orders. However, after three months of positive expectations, they predict a decrease in the volume of services in progress.
According to the NBU, construction companies maintained positive assessments of their performance for the fifth consecutive month due to a revival in demand for mortgage loans under preferential government programs, budget financing for construction and road rehabilitation, and seasonal factors. However, the sectoral index still fell to 50.6 points in August from 51 points in August.
It is noted that builders were somewhat more confident about the growth in construction volumes and were set to increase new orders, as well as purchases of raw materials and supplies. Also, respondents’ expectations for growth in the procurement and cost of contractor services have significantly increased, while negative assessments of their availability have softened.
Overall, most respondents expect their own products and services to rise in price amid rising purchase prices.
As for employment, the NBU assesses it as “heterogeneous.”
For the third month in a row, trade companies have been expecting an increase in staff (51.4 points), while construction managers, like last month, do not expect any changes (50 points). At the same time, respondents in industry and services still expect a reduction in the total number of employees (48.2 and 47.2 points, respectively).
The NBU clarified that the monthly survey of enterprises was conducted from September 4 to 22. It involved 502 companies. Among the surveyed enterprises, 44.4% are industrial companies, 28.9% are service companies, 20.7% are trade companies, and 5% are construction companies; 32.3% of respondents are large enterprises, 29.3% are medium-sized enterprises, and 38.4% are small enterprises.
At the same time, 31.9% of the surveyed enterprises carry out export and import operations, 9.6% – only export operations, 15.5% – only import operations, 43% – do not carry out external economic operations.
