In December, businesses once again downgraded their performance assessments, according to the National Bank of Ukraine (NBU).

In December, businesses continued to lower their assessments of business activity. In December 2024, the Business Activity Expectations Index (BAEI) stood at 45.9, compared to 47.2 in November, and was nearly the same as in December 2023 (45.7).

This information is provided by the National Bank of Ukraine (NBU), citing the Business Activity Expectations Index (BAEI).

It is noted that the assessments of enterprises participating in the surveys were influenced by:

• the deterioration of the security situation;
• the increase in shelling of energy facilities and their prolonged recovery;
• a shortage of qualified personnel;
• further growth in business costs for wages, energy supply, and logistics;
• accelerating inflation;
• a decline in investment demand;
• seasonality.

At the same time, the National Bank reported on business sentiments. According to the regulator:

1. Trade enterprises assessed their business activity results cautiously, considering the challenging security situation and energy shortages: the sector index in December was 49.9 (in November – 51.4, in December 2023 – 46.9).
2. Industrial enterprises also provided a more cautious assessment of their current activities due to energy shortages, a lack of qualified workers, and rising production costs: the sector index was 44.6 (in November – 46.7, in December 2023 – 46.9).
3. Service sector enterprises slightly weakened their assessments regarding economic prospects amid significant disruptions in energy supply, a shortage of qualified personnel, and increased business costs: the sector index was 44.5 (in November – 44.8, in December 2023 – 44.0).
4. Construction enterprises provided the most pessimistic assessments of their current economic results for the second consecutive time, considering the seasonality of construction work and declining investment demand: the sector index was 43.4 (in November – 43.6, in December 2023 – 42.1).

“Construction and service sector enterprises expected an increase in the pace of growth of purchase prices, as well as prices/tariffs for their own products/services, while respondents from industry and trade predicted a weakening,” the report states.

Additionally, according to the report, the labor market situation remains challenging, although expectations regarding employment have somewhat softened. It is reported that construction, trade, and service sector enterprises anticipated a slowdown in the pace of staff reductions, while only industrialists projected a slight acceleration.

Background. Earlier, Mind reported that in October, Ukrainian businesses continued to soften their assessments of business activity. The Business Activity Expectations Index (BAEI) approached the neutral level, standing at 49.4 compared to 48.7 in September.