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Business Barometer

«Business Barometer»
by the Ukrainian Chamber of Commerce and Industry


Hot Issue: “Is it advisable to lift the restrictions on access to bank secrecy during wartime?“

In May 2024, the overall Business Barometer Index decreased to 43.3 points, showing a decline of ⇩-1.3 points compared to April. The Business Barometer has shown a gradual strengthening of negative expectations for the second consecutive month.

Stability is only expected in the construction sector. The Business Barometer Index stands at 50 points, but the dynamics compared to the previous month are negative, dropping by ⇩ -2.5 points.

A slight relative improvement in the services sector ⇧+0.4 points in the Barometer Index proved insufficient to cross the 50-point threshold, stopping at 46.7 and failing to enter the zone of positive expectations.

The trade sector is characterized by a slight predominance of negative expectations, which slightly intensified last month, reaching 45.7 points (⇩-1.5 points).

The most challenging situation is expected in the manufacturing sector, with a significant drop to 39.5 points (⇩ -2.7 points). 

The micro-enterprises are more optimistic about the future, with an index value of 47.4 points (⇧+3.4 points), in contrast to larger businesses, which are showing a negative trend: small enterprises at 41.7 points (⇩ -2.2 points); medium-sized at 41.1 points (⇩ -4.7 points); and large enterprises at 37.1 points (⇩ -10.7 points). 

Exporters' outlook on the future has moderately improved, yet remains within the realm of negative expectations. The Business Barometer index has risen slightly by 0.3 points to 44.6 points.

The hot question of May regarding the lifting of restrictions on access to bank secrecy clearly demonstrated the business community's stance. 75% of respondents believe such changes are inadvisable. Of these, 47% are convinced that it would lead to abuse of power, and 28% believe that the current restrictions are adequate. Only 10% positively view the lifting of restrictions, while 15% are uncertain about their response.

A Business Barometer value of 50 indicates no change in expectations. A value above 50 suggests that businesses expect economic conditions to improve compared to the previous month; a value below 50 indicates negative expectations regarding changes compared to the previous month. 

Globally, under favorable business conditions, the index value typically reaches 60 or higher.
 

The May 2024 report is available here.

 

 

The Business Barometer from the Ukrainian Chamber of Commerce and Industry (UCCI) represents the perspectives of enterprises and entrepreneurs who are members and partners of the UCCI.

It reflects expectations for changes in the business environment in the coming month compared to the previous one.

Based on a survey that considers the status of indicators  (or "sub-indices") of the respondents' activities across four sectors (manufacturing, construction, trade, services), the Business Barometer is tailored to meet the needs of the members and partners of the Ukrainian Chamber of Commerce and Industry. A distinctive feature of the Business Barometer is the inclusion of specialized industry questions and an analysis of export conditions, which provides additional insights into market conditions.

  • The survey covers questions regarding:
  • Volume of new orders/purchase of goods;
  • Production volumes/turnover;
  • Total employment;
  • Purchasing prices/contractor prices;
  • Unfulfilled order volume/inventory levels;
  • Prices of own production/trade margin*;
  • Exports*

* - Extra questions that are not considered in the calculation of the Business Barometer.

The Business Barometer is calculated using the PMI methodology (Purchasing Manager Index):  

PMI = (P1 * 1) + (P2 * 0,5) + (P3 * 0)
where:
P1 = % of responses indicating an improvement
P2 = % of responses indicating no change
P3 = % of responses indicating a deterioration

A value above 50 signifies growth or expansion in the economic sector compared to the previous month. 
A value below 50 indicates a contraction. 
A value of 50 indicates that there is no change compared to the previous month.
 
Attention! The indicators "Purchasing Prices" and " Unfulfilled Order Volume/Inventory Levels" are considered deterrents and are interpreted inversely in the calculation.

To detail the provided responses, a 5-point scale is used (will decrease – likely to decrease – no change – likely to increase – will increase).

For calculating the Business Barometer indicator, a 3-point scale is applied, and responses are summed up as follows:

  • will decrease and likely to decrease;
  • no change;
  • likely to increase and will increase.

  

 

This publication was created under the “Support to inclusive economic development in Ukraine by linking export strategy with regional development and SDGs” Project, which is funded by German Government and implemented by German Federal Company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in cooperation with the United Nations Development Programme (UNDP) in Ukraine. The views, conclusions or recommendations expressed in this document are those of the authors and compilers and do not necessarily reflect the views of the German Government, GIZ, the United Nations Development Programme in Ukraine or other United Nations agencies.