Business news from Ukraine

The Business Activity Outlook Index (BAOI), calculated by the National Bank of Ukraine (NBU), fell to 48.6 in December from 49.8 in November, and continued to fall below the neutral level, as evidenced by the results of a survey of enterprises released on Tuesday conducted by the central bank.
“For the second month in a row, business expectations for their economic results were below neutral levels amid continuing quarantine restrictions. Surging energy prices, shortages of raw materials, higher production costs, a greater probability of an escalation of the armed conflict and an increase in COVID-19 cases worldwide weakened expectations in all of the surveyed sectors,” the National Bank said, commenting on the results of the December poll.
According to the study, services companies have been expecting weaker performance for two months running, the DI being 47.8 in December, down from 48.8 in November. Respondents expected a decrease in the number of new orders, while also expecting no change in the amount of services provided. At the same time, they expected an increase in the amount of services that are being provided.
The expectations of trading companies also worsened, moving below their neutral level, as the sector’s DI dropped to 49.6 in December, down from 50.0 in November. Respondents expected an increase in the stocks of goods for sale, while also expecting the amount of goods purchased for sale to be unchanged on the previous month. Trading companies said they intended to decrease their trade margins further. With a seasonal rise in demand, respondents remained upbeat about their trade turnover.
Construction companies reported the most pessimistic expectations of their performance, as the sector’s index dropped to 47.2 in December, down from 50.4 in November, dragged down by a seasonal decline in economic activity and narrowing investment demand. Respondents expected a drop in the number of new orders and, consequently, a drop in their purchases of raw materials and supplies.
Industrial companies were pessimistic about their performance and economic outlook for the first time in the last seven months, as the sector’s DI dropped to 49.0, down from 50.7 in November. Respondents expected a decrease in the number of new export orders.
According to the NBU, employment expectations worsened: only trading companies said they intended to hire more staff, while industrial, construction and services companies reported intentions to cut their workforces.
The monthly survey was conducted from December 6 to December 23, 2021. A total of 405 companies were polled. Of the companies polled, 44.7% are industrial companies, 28.6% services companies, 20.7% trading companies, and 5.9% construction companies; 33.3% of the respondents are large companies, 28.9% medium companies, and 37.8% small companies.