Businesses downgraded expectations for economic development – NBU survey

Businesses downgraded expectations for economic development – NBU survey

Ukrinform
Businesses have significantly worsened their expectations for their performance and business prospects in response to strengthened quarantine measures amid a traditional decline in business activity at the beginning of the year.

This is evidenced by the results of the business activity expectations index (BAEI) conducted by the National Bank of Ukraine (NBU), the regulator's press service reports.

“The index was 37.6 in January 2021, down from 45.5 in December 2020. For 11 months in a row – since March 2020 – companies’ expectations have been below the equilibrium value of 50 points. Companies across all of the surveyed sectors reported considerably dimmer expectations for their business performance,” reads the report.

Companies in the trading sector were hit the most by tighter anti-epidemic restrictions amid the decline in economic activity usual in the first month of the year. These companies sharply deteriorated their expectations regarding trade volumes and economic results.

Companies in the services sector also reported negative performance prospects due to the lockdown, expecting a drop in the amount of provided services and the number of new orders.

“Industrial companies reported significantly dimmer expectations for the amount of manufactured goods, the number of new orders for products, and for raw material and supplies stocks and prices,” reads the report.

The lowest expectations remain among construction enterprises (housing construction). The sector’s index was 33.1, down from 39.1 in December 2020. Construction companies expect a sharp drop in construction volumes and the number of new orders. They also report firmer expectations for a rise in contractor prices and dimmer expectations for the availability of contractors.

The survey was conducted between January 5 and January 25, 2021 among 202 companies of Ukraine. Out of the polled companies 35.6% are industrial companies, 31.7% companies in the services sector, 27.7% trading companies, and 5.0% construction companies.

The NBU noted that the survey only reflects the opinions of the respondents (top-managers of Ukrainian companies), and does not represent the NBU’s forecasts or assessments.

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