Businesses are improving their forecasts, but the risk of hostile attacks on energy is holding back expectations - NBU

Businesses continued to downgrade their business activity estimates in October, but the risk of hostile attacks on the energy sector and a shortage of personnel kept expectations in check, and companies continued to forecast higher prices, according to a NBU survey, UNN reports.

Details

Positive business expectations were affected:

• optimistic forecasts for international financing;
• revival of consumer demand;
• Stable situation in the energy sector;
• sufficient supply of goods;
• favorable weather conditions.

At the same time, deterrents remained:

• increased shelling of port infrastructure; 
• risk of further attacks on energy facilities; 
• Increased business energy costs;
• shortage of qualified personnel, etc.

It is reported that in October 2024, the index of business activity came close to the neutral level and amounted to 49.4 compared to 48.7 in September.

Enterprises of trade slightly decreased, but maintained the most optimistic estimates of their business activity due to the revival of consumer demand, sufficient supply of goods, and improved logistics. Trade companies predicted an increase in turnover and purchases of goods for sale, while downgrading their estimates of inventories/residuals of goods for sale. Trade companies were still set to see a decline in trade margins.

Enterprises of industry assessed their current performance cautiously, given the difficult security situation and rising energy, labor, and logistics costs. Respondents continued to expect an increase in output and new orders for products, and softened their estimates of work in progress and finished goods. At the same time, expectations for the volume of new export orders for products weakened somewhat. 

Construction companies downgraded their estimates of economic performance in the short term, given the seasonal slowdown in road and infrastructure construction. Construction companies expected a further increase in construction, but somewhat weakened their expectations for growth in new orders and purchases of raw materials. Survey respondents were more confident in their forecasts of an increase in purchases of contractor services, while estimates of their expected value declined. Negative assessments of the availability of contractors continued to soften.

Enterprises in the sphere of services increased their assessment of their current development, but remained the most restrained due to increased shelling of port infrastructure, higher costs, and a shortage of qualified personnel. For the first time in six months, respondents expected a slight increase in the volume of new orders for services, while being less cautious about the volume of services provided and services in progress.

Against the backdrop of persistent expectations of high growth rates in purchase prices, companies in all surveyed sectors predicted an increase in prices/tariffs for their products/services.

The situation on the labor market remains difficult. All surveyed sectors expected to reduce the number of employees. While industrial and construction companies predicted an acceleration in the rate of decline, trade and services predicted a slowdown.

What will happen to prices - NBU answerOctober 31 2024, 12:34 PM • 16653 views