In December 2023, for the third month in a row, business provided restrained assessments of the current results of its activities – the Business Activity Expectations Index (PEI) remained below the neutral level (50 points) and amounted to 45.7 compared to 49.1 in November. This was reported by the press service of the National Bank with a link to the results of a monthly survey of enterprises.
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Reason for decline
“Uncertainty about the duration of hostilities, risks of irregular flows and insufficient volumes of international assistance, increased logistics costs due to border blockades, high fuel prices, narrowing investment demand, shortage of qualified personnel and weakening demand negatively affected the assessments of participating enterprises of all sectors in monthly surveys,” explains the NBU.
According to the National Bank, trading enterprises, after nine months of positive expectations, worsened estimates of their business activity due to a decrease in the volume of imports of goods caused by the blocking of the border and a decrease in the purchasing power of the population.
Industrial enterprises for the second month in a row predicted a deterioration in their economic results activities, given the decrease in the volume of export-import transactions, the increase in logistics costs due to the blocking of the border and high fuel prices.
Among other sectors, enterprises in the construction industry assessed the economic results of their activities the most pessimistically, taking into account the seasonal decline in economic activity, narrowing investment demand and the lack of qualified personnel.
Service sector enterprises increased their negative assessments of the results of their current activities, taking into account logistical difficulties with crossing the border, high fuel prices and weak demand.
“All survey participants, except industrial enterprises, predicted a slowdown in the growth rate of purchase prices, as well as prices/tariffs for their own products/services. Against the backdrop of a seasonal slowdown in labor market activity, employment estimates were mixed. Heads of enterprises in most sectors continued to expect a reduction in the total number of employees, most of all in the construction sector,” noted National Bank analysts.
At the same time, in the trade sector, after two months of negative expectations, they were determined to increase the number of employees .
Survey methodology
The survey of enterprises was conducted from December 4 to December 21, 2023. 426 enterprises took part in the survey.
