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Business Barometer in June 2024: Pessimism Prevails, but Construction is on the Rise
In June 2024, the overall Business Barometer Index decreased to 40.5 points, showing a decline of 2.8 points compared to May of this year. This is the third consecutive month that the Barometer has recorded a gradual increase in negative expectations among businesses.
An improvement is forecasted only in the construction sector. The Business Barometer Index here stands at 54.0 points, showing a positive dynamic of 4.0 points compared to the previous month.
A slight deterioration in business expectations is observed in the service sector, where the Barometer “arrow” stopped at 46.0 points, decreasing by 0.7 points. The manufacturing sector is characterized by an increase in negative expectations over the past three months, reaching 37.5 points in June, which is 2.0 points lower than the previous month.
The most difficult situation is forecasted in the trade sector, where the index fell by 9.3 points to 36.4 points.
Compared to the previous month, an improvement in expectations is observed only among representatives of large enterprises, where the index rose by 6.2 points to 43.3. Smaller businesses show negative dynamics: micro-business – 43.8 points (-3.6), small business – 38.8 points (-2.9), medium-sized business – 38.9 points (-2.2).
Exporters have also experienced a negative shift, with the Business Barometer Index decreasing by 6.0 points to 38.6 points.
The biggest challenges for businesses today are the increase in electricity tariffs (47%) and the depreciation of the hryvnia (28%). There is less concern about the slow pace of reforms (15%). Businesses have largely adapted to challenges related to power outages and mobilization.
Monthly, in addition to the regular survey, respondents can answer the “hot” question of the month and contact the hot line of the Ukrainian Chamber of Commerce and Industry.
The survey is conducted in verified chatbots on Telegram and Viber and takes only 2 minutes.
TheJune 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.
* - 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:
