The index of business activity expectations decreased in January – NBU

In January, the business worsened its assessment of the current results and prospects of its activities in Ukraine. The National Bank of Ukraine reported this on Thursday, February 1.

The Business Expectations Index (PEI) fell to 41 last month from 45.7 in December 2023, it said.

The NBU explains that the business is negatively affected by: increased intensity of the conflict, uncertainty in the time and amount of external financial assistance, blockage of the western borders, increase in production costs to strengthen cyber defense, lack of qualified personnel and seasonal weakening of economic activity at the beginning of the year.

In particular, industrial enterprises raised pessimistic expectations about their economic performance due to production costs and logistical difficulties crossing the western border.

Traders said their operations were affected by higher import prices due to border closures, high fuel prices and slowing demand.

Businesses in the service sector reported a drop in demand as a result of an increase in their own tariffs, as well as security risks.

Construction enterprises pointed to the lack of qualified personnel, as well as seasonal factors that negatively affect their work.

As the Central Bank notes, all market participants predict an increase in the prices of their own products and services against the backdrop of increased expectations of an acceleration in the growth rate of purchase prices.

“Employment estimates have also worsened: the heads of businesses in all sectors expect a reduction in the total number of employees, the most important in the construction sector,” indicated the NBU.

The Prime Minister of Ukraine Denis Shmigal spoke with the ambassadors of the Group of Seven (G7) countries on the issues of financial assistance to Ukraine.