By KYIV. Nov 1 (Interfax-Ukraine) – The Business Activity Expectations Index calculated by the National Bank of Ukraine (NBU) fell to 44.9 in October from 46.1 in September and continued to remain below the neutral level, as evidenced by the results of a survey of enterprises published by the National Bank Ukraine on Monday.
"The negative impact of the full-scale war on the supply of goods, existing logistical hurdles, destroyed production facilities, and a decline in real household income are restraining economic recovery, while also worsening expectations across all sectors. This is evidenced by the business activity expectations index, which the NBU calculates on a monthly basis, apart from the forced break in March–May 2022. In October 2022, the index was 44.9, down from 46.1 in September," the NBU said.
"The loss of production and energy facilities increased industrial companies’ negative expectations, as the sector’s index dropped to 45.8 in October, down from 47.1 in September. Respondents downgraded their expectations for the number of new orders for products, including export orders. They also expected a decrease in their stocks of raw materials and supplies and in their finished goods stocks. At the same time, industrial companies remained upbeat about the amount of manufactured goods," the report says.
"Construction companies have reported the most guarded performance expectations across all sectors for two months in a row: the sector’s index was 38.2, down from 41.0 in September. Respondents reported firmer expectations for a drop in construction volumes, the number of new orders, and in purchases of raw materials and supplies. In contrast to the two previous months, respondents expected a decrease in purchases of contractor services," it said.
"Although downgrading slightly their expectations of their economic outlook for October, trading companies remained the closest to the neutral level: the sector’s index was 48.9, down from 49.9 in September. Trading companies said they had somewhat dimmer expectations for their trade turnover, and continued to report guarded expectations for purchases of goods for sales, while also reporting a drop in their stocks of goods for sale. Respondents reported slightly less firm expectations of a rise in purchase prices and in the price of goods purchased for sale. At the same time, they reported stronger intentions to cut their trade margins," the NBU reported.
"On the back of further damage done to transportation and energy-generating infrastructure and falling household income, services companies reported a more pessimistic economic outlook, the sector’s index being 42.2, down from 43.4 in September. Respondents reported firmer expectations of a decrease in the amount of services provided, the number of new orders, and the amount of services that are being provided. At the same time, they reported weaker intentions to raise their selling prices," it said.
This survey was carried out from October 4 through October 24, 2022. A total of 423 companies were polled. Of the companies polled, 45.4% are industrial companies, 28.1% services companies, 22% trading companies, and 4.5% construction companies; 31% of the respondents are large companies, 32.4% medium companies, and 36.6% small companies.
