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

Hot Issue: "Is it time for a military leavy for FOPs (individual entrepreneurs)"

In March 2024, the overall Business Barometer Index reached 45.8, showing an increase of ⇧+2.1 points compared to February 2024. However, the Business Barometer Index still remains below the critical 50 points, indicating prevailing negative expectations.

All sectors, except the services sector, anticipate a relative improvement in business conditions, although the services sector itself records the highest index value. The sectoral Barometer indices are as follows: manufacturing at 45.7 ⇧+4.0, construction at 41.4 ⇧+4.4, services at 47.5⇩-0.4, and trade at 42.1 ⇧+0.4

Exporters have eased their negative expectations, with an increase in the index by ⇧+1.1 points to 45.0 points.

Micro, small, and medium enterprises also show a weakening of negative expectations. The increase in the Barometer index is respectively ⇧+2.2, ⇧+5.1, and ⇧+1,5, but the values remain below 50 points.

Large enterprises, after a sharp strengthening of positive expectations in February, have reversed their position to align with smaller-sized businesses. The Barometer value is 45.6.

The topic of "Introducing a Military Levy for FOPs" revealed varied business perspectives. Over half of the respondents (52%) do not support or are categorically against the introduction of a military levy for sole proprietors. Nearly a third (36%) hold the position that it should be implemented with certain compensatory mechanisms for small businesses.

The March 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.