Business downgrades exchange rate expectations and increases positive expectations for business activity
This is evidenced by the data of the NBU, Ukrainian News Agency reports.
Despite security risks and logistical difficulties, including crossing the border, respondents predicted moderate growth in the production of goods and services, as well as were positive about the development of their own enterprises.
Inflation expectations continued to improve, but exchange rate expectations slightly worsened.
The business activity expectations index (BAEI) increased to 103.0% compared to the 101.6% in the fourth quarter of 2023 (hereinafter - the fourth quarter).
The survey participants continued to positively assess their future financial and economic condition, had optimistic expectations about the future volumes of sales of their own products and investment costs for machines, equipment and tools.
The development of enterprises is most restrained by hostilities and their consequences.
The impact of the shortage of qualified workers has significantly increased.
The business for the fourth quarter in a row has expected growth in the production of goods and services in Ukraine in the next 12 months, albeit at a slightly lower rate: the response balance was 8.5% compared to the 15.2% in the fourth quarter.
Growth was predicted by enterprises of all types of economic activity, except for the mining industry, as well as most areas, the size of the number of employees and activities.
The improvement in inflation expectations continues for the sixth consecutive quarter: in the first quarter of 2024, annual inflation expected in the next 12 months was 11.0%, compared to 11.3% in the previous quarter.
Almost half of respondents (48.4%) expected inflation no higher than 10.0%.
Hostilities remain the most significant proinflationary factor for 82.8% of respondents.
The significant impact of the "cost of production" factor (65.8%) remains. At the same time, the influence of the exchange rate factor increased - by 7.3 p.p. to 59.5%.
Exchange expectations slightly worsened: the average value of the exchange rate, which respondents expect after 12 months, is 40.44 UAH/USD (in the previous quarter - UAH 40.06 UAH/USD).
The share of respondents who predict that the hryvnia exchange rate in the next 12 months will not exceed 40.00 UAH/USD, decreased in the quarter from 55.4% to 46.0%.
The current financial and economic state of enterprises is still weak, while its gradual improvement continues: the balance of answers was "minus" 1.4% compared to "minus" 5.6% in the fourth quarter.
The business discreetly assessed the improvement in the financial and economic condition of its own enterprises in the next 12 months: the balance of answers is 3.7% (in the fourth quarter - 4.1%).
The most optimistic estimates were provided by enterprises of the mining industry and construction - the balance of answers 15.9% and 15.8%, respectively.
The survey participants maintained optimistic forecasts on the volume of sales of products, including on the foreign market: the balance of answers is 10.6% and 6.8%, respectively (in the fourth quarter - 10.6% and 9.7%, respectively).
The total sales of products are expected by respondents of the majority of the types of economic activity, the most significant - construction, agriculture and the extractive industry (the balance of responses is 21.1%, 16.0% and 13.6%, respectively).
The growth of sales of products on the foreign market is mainly expected by enterprises of mining, manufacturing, trade, as well as transport and communications.
Respondents maintained positive estimates on the change in the level of investment costs for machines, equipment and tools: the balance of responses is 8.3% (in the fourth quarter - 6.6%).
At the same time, pessimistic estimates regarding investment costs for construction work softened: the balance of responses is "minus" 1.5% (in the fourth quarter - "minus" 6.9%).
Enterprises attracting foreign investments continue to expect an increase in their volumes in the next 12 months: the balance of responses is 16.1% (in the fourth quarter - 11.3%).
The highest expectations were energy and water supply enterprises (62.5%).
The proportion of respondents planning to attract foreign investment in the next 12 months increased to 22.8%, compared to 20.7% in the previous survey.
Survey participants continued to expect a decrease in the number of employees at their enterprises in the next 12 months: the answer balance is "minus" 6.3% (in the fourth quarter - "minus" 6.5%).
The most optimistic forecasts were provided by respondents in the mining industry, construction, as well as energy and water supply (the balance of responses is "minus" 20.5%, "minus" 20.0% and "minus" 16.7%, respectively).
However, respondents in the trade enterprises for the fourth quarter in a row have predicted an increase in the number of workers.
Expectations continued to increase regarding the growth of labor costs for one employee: the balance of responses is 62.6% compared to the 57.9% in the fourth quarter.
Against the backdrop of constant expectations of enterprises regarding the need for borrowed funds in the near future, the share of respondents planning to take out bank loans decreased slightly and amounted to 34.9% (in the fourth quarter - 36.0%).
Enterprises planning to attract loans traditionally prefer loans in the national currency - 81.1% (in the fourth quarter - 80.3%).
The most significant obstacle to attracting new loans remains too high rates - 49.5% of responses.
At the same time, the influence of the factors "availability of other sources of financing" and "uncertainty about the enterprise's ability to fulfill debt obligations on time" increased by 1.9 p.p. to 42.1% and 2.2 p.p. to 24.1%, respectively.
The share of companies planning to raise funds abroad was almost unchanged at 7.7% compared to 7.8% in the previous quarter.
The quarterly survey was conducted from January 31, 2023 to February 27, 2024. 661 enterprises from 21 regions of the country took part in the survey (excluding the temporarily occupied territories of the Autonomous Republic of Crimea, as well as the Donetsk, Luhansk and Kherson Regions).
Among the surveyed enterprises 21.8% are companies of wholesale and retail trade, 18.2% - manufacturing industry, 14.7% - agriculture, 13.6% - transport and communications, 6.7% - mining industry, 4.5% - energy and water supply, 3.0% - construction, 17.5% - others; 30.0% of respondents are large enterprises, 38.1% are medium, 31.9% are small. The survey results reflect only the opinion of respondents - managers of enterprises, and not estimates of the National Bank of Ukraine.
As Ukrainian News Agency earlier reported, the business activity expectations index (BAEI) is an aggregate indicator of the expected development of enterprises in the next 12 months.
It is calculated according to the results of surveys of enterprises as the arithmetic mean of the balance of answers regarding the financial and economic condition of enterprises, the total volumes of sales of products of its own production, investment costs for construction work, investment costs for machines, equipment and tools, the number of employees.
The index value of more than 100 means positive economic moods prevail in the society, below 100 - negative economic moods.
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30 of April 2024
