Business in December worsened the assessments of the economic condition of their enterprises.
General estimates of employment have worsened / Photo from UNIAN Vladimir Gontar
Enterprises in all sectors of the economy predict a further rise in prices for their own products and services against the backdrop of rising prices for raw materials, supplies and goods from suppliers.
This was reported by press service National Bank based on the results of the monthly calculation of the Business Activity Expectations Index (IODA).
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It is noted that business in December again worsened the assessments of the economic condition of their enterprises. The rapid increase in energy prices, a shortage of raw materials, an increase in production costs, an increase in the threat of a military conflict, the complication of the global epidemic situation worsened the assessments of enterprises in all sectors participating in monthly surveys.
According to the NBU, general estimates of employment worsened: only trade enterprises expected an increase in the number of employees, but respondents from industrial, construction and service industries were disposed to reduce it.
As for the assessment of the results of activity and development prospects, the industrial enterprises for the first time in 7 months gave pessimistic assessments. The respondents expected the volume of new export orders and the volume of work in progress to decrease. At the same time, they retained positive assessments regarding the volume of manufactured products and the volume of new orders for products.
Trade enterprises’ expectations also worsened: they expected an increase in the stock of goods for sale and the volume of purchases of goods for sale at the level of the previous month. Sector respondents are determined to continue to lower their trade margins. Despite the seasonal increase in demand, the respondents retained their optimistic expectations regarding the volume of goods turnover.
For the second month in a row, service enterprises expected their economic results to deteriorate. The respondents predicted a decrease in the volume of new orders and did not expect a change in the volume of services provided. At the same time, they are tuned in to increase the volume of services in progress.
Construction companies are the most pessimistic about their performance due to the seasonal contraction in economic activity and the contraction in investment demand. The respondents expected a decrease in the volume of new orders and, as a result, a decrease in the volume of purchases of raw materials and supplies. At the same time, optimistic assessments remained regarding the volume of construction work performed and the procurement of contractors’ services.
Monthly Business Expectations Index:
The Monthly Business Activity Expectations Index (IODA) is a tool for the rapid assessment and tracking of economic development trends. The index is calculated on the basis of surveys of Ukrainian enterprises in the real sector of the economy.
Taking into account the indicators of the first half of the year, high energy prices, as well as the current complication of the epidemic situation, the National Bank downgraded the forecast for economic growth from 3.8% to 3.1% in 2021.
The NBU also revised its forecast for GDP growth in 2022 from 4% to 3.8%. In 2023, the economy will grow by 4%.