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Expectations of Ukrainian business have become positive for the first time in a year and a half

Expectations of Ukrainian business have become positive for the first time in a year and a half

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BAEI went up from 49.5 in March to 51.5 in April, crossing the neutral level of 50 points, indicating positive expectations for production growth.

These expectations were attributed to improvements in energy supply, increased food and fuel supply, improved inflation and exchange rate expectations, and increased consumer confidence.

Retailers provided the most optimistic ratings of their performance and prospects for the second consecutive month, given the slowdown in inflationary pressure, a resurgence in consumer demand, and increased supply of goods. The sectoral index in April rose to 57.6, from 53.6 in March. Respondents improved their expectations for sales volume, while also expecting an increase in trade margins for the first time since July 2019.

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Manufacturing companies have been expecting economic growth for two months in a row, due to improved logistics, reduced production costs after the energy crisis has subsided, and stabilizing fuel prices. The sectoral index in April was at 50.5, down from 51.2 in March.

The service sector has continued to soften negative assessments of its economic prospects due to the gradual recovery of demand, improved energy supply, and seasonal factors. The sectoral index in April was at 48.8 – compared to 45.7 in March. Respondents significantly softened their negative assessments of incoming orders, while expecting an increase in the volume of services provided.

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The construction sector provided the most restrained assessments of its economic performance due to low consumer financial capacity, lack of investment, and unfavorable weather conditions: the sectoral index in April was 44.9 (45.9 in March). Unlike the previous month, respondents expected a decrease in construction volumes and also increased negative assessments of new order volumes.

Despite some softening of forecasts, the majority of participating companies expect operational costs and tariffs for their products to increase.

Respondents’ assessments of employment have softened: retailers are expecting an increase in the number of employees for the first time since January 2022, while the rest of the surveyed sectors predict a slower pace of personnel reduction than in previous months.

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The survey was conducted from April 4 to 21, with 481 companies participating. Among the respondents, 46.6% were industrial companies, 28.7% were service sector companies, 20.8% were retailers, and 4% were construction businesses; 33.1% of respondents were large companies, 30.6% were medium-sized, and 36.4% – small businesses.

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