Rivne Oblast
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Business Outlook Survey ResultsРезультати of surveys опитувань of Vinnitsa керівників region * enterprisesпідприєм managersств м. Києваof regarding Rivne і Київської O blasttheir області щодоbusiness їх ділових expectations очікувань* * Q2 2020 Q2 2018 This survey wasI conducted квартал after 2018 the government року announced it would relax the quarantine *This survey only reflects the opinions of respondents in Rivne oblast (top managers of *Надані результати є відображенням лише думки респондентів – керівників підприємств Вінницької companies) who were polled in Q2 2020, and does not represent NBU forecasts or estimates області в IІ кварталі 2018 року і не є прогнозами та оцінками Національного банку України. L; Business Outlook Survey of Rivne Oblast Q2 2020 A survey carried out in Rivne oblast in Q2 2020 showed that respondents expected a drop in the output of Ukrainian goods and services over the next 12 months on the back of the quarantine. They had moderate expectations for the performance of their companies over that period. Respondents expected that inflation would be moderate and reported higher depreciation expectations 1 The top managers of companies said they expected that over the next 12 months: . the output of Ukrainian goods and services would drop: the balance of expectations was (-27.3%) compared to (-23.1%) in Q1 2020 and (-34.1%) across Ukraine . the prices of consumer goods and services would rise at a slower pace: 66.7% of respondents expected the inflation rate to be lower than 7.5% (compared to 54.9% across Ukraine). Respondents referred to the exchange rate, household income and global prices as the main inflation drivers (Figure 2) . hryvnia would depreciate more pronouncedly: 66.7% of respondents (compared with 33.3% in the previous quarter) expected the hryvnia to weaken against the US dollar, with the figure across Ukraine being 68.2% . the financial and economic standings of their companies would improve: the balance of expectations was 8.3% (compared to 0.0% in the previous quarter). Companies across Ukraine expected a deterioration in their financial and economic standings (-1.8%) (see Table) . total sales would remain unchanged: the balance of responses was 0.0% compared with 7.7% in the previous quarter. External sales were expected to grow at a somewhat faster pace (the balance of responses was 33.3% compared with 25.0% in Q1 2020). Overall, companies across Ukraine expected sales to decrease slightly, the balances of responses being (-0.1%) and (-0.7)% respectively . investment in construction and in machinery, equipment, and tools would decrease: the balances of responses were (-30.0%) and (-9.1%) respectively compared with (-20.0%) and 20.0% respectively. Across Ukraine, the balances of responses were (-16.1%) and (10.5%) respectively . staff numbers would decrease: the balance of responses was (-16.7%) compared with 7.7% in Q1 2020 and (-17.3%) across Ukraine (Figure 4) . the growth in both purchase and selling prices would decelerate: the balances of responses were 66.7% and 41.7% respectively (compared to 83.3% and 61.5% in the previous quarter) (Figure 6). Raw material and supplies prices and the exchange rate were cited as the main selling price drivers. The impact of global prices and demand was also reported to have increased significantly compared to the previous quarter (Figure 7) . the growth in per-unit production costs would decelerate: the balance of responses was 25.0% (compared to 45.5% in Q1 2020). Wage costs per staff member were expected to remain unchanged: the balance of responses was 0.0% (compared to 66.7% in Q1 2020) (Figures 4 and 6). Insufficient production capacity and high energy prices were the main drags on the ability of companies to boost production (Figure 5). The impact of weak demand strengthened noticeably. Respondents expected that their borrowing needs would continue to increase in the near future (Figure 8). The companies that planned to take out corporate loans always opted for domestic currency loans. Respondents said that lending standards had tightened (Figure 9). Respondents referred to other funding sources as the main factor that deterred them from taking out loans (Figure 10). All of the respondents said that they had encountered no difficulties in effecting transactions with funds deposited in bank accounts (96.5% across Ukraine). Assessments of financial and economic standings as of the time of the survey (Figure 3) . The current financial and economic standings of companies were assessed as satisfactory: the balance of responses was 0.0% (unchanged on the previous quarter). Across Ukraine, the current financial and economic standings of companies were assessed as bad, the balance of responses being (-11.6%) . Finished goods stocks were assessed at a level lower than the normal one: the balance of responses was (-14.3%) compared with (-25.0%) in Q1 2020. Spare production capacity had increased. Companies had a sufficient amount of unutilized production capacity to meet any unexpected rise in demand: the balance of responses was 8.3% compared to 0.0% in Q1 2020. 1 This survey was conducted after the government announced it would relax the quarantine. 2 Business Outlook Survey of Rivne Oblast Q2 2020 Survey Details2,3 Respondents in terms of main economic Respondents in terms of enterprise size based Respondents in terms of business activities, % on staff number, % activities,% Neither exporters Exporters only Other Agriculture Large (more 16.7 nor importers 16.7 25.0 than 250 41.7 Transport and persons) communications 25.0 8.3 Imports only 8.3 Wholesale and Manufacturing Both exporters Small (up to 50 retail trade 16.7 and importers persons) 16.7 33.3 Medium (from 51 and up 50.0 Energy and to 250 persons) water supply 25.0 16.7 . Period: 5 May through 1 June 2020. A total of 12 companies were polled. No economic activity was able to generate a representative sample. Business Business Outlook outlook Index index for for Next next 12 12 Months months in in Terms terms of regions,%Regions4, % Riv ne Oblast Voly n Oblast Chernihiv Oblast 103.1 90.5 Zhy tomyr 85.5 Sumy Oblast Oblast 87.1 125.7 Ky iv and Lv iv Oblast Ky iv Oblast Poltav a Oblast Kharkiv Oblast 105.0 Ternopil Oblast 92.4 81.4 92.1 97.8 Khmelny tskyi Cherkasy Luhansk Oblast Iv ano-Frankivsk Oblast Vinny tsia Oblast Zakarpattia Oblast 89.8 Oblast 102.0 Oblast 93.2 no data 70.9 Donetsk 99.5 Cherniv tsi Oblast Kirov ohrad Oblast Dnipropetrov sk Oblast Oblast 86.7 70.1 85.7 no data Zaporizhia My kolaiv Oblast Odesa 58.8 Oblast Oblast 95.6 88.9 Kherson Oblast 101.5 minimum 58.8 1 quartile 86.0 1 quarter 2 quartile (median) 91.3 Crimea 2 quarter 3 quartile 99.0 no data 3 quarter maximum 125.7 4 quarter Ukraine 90.8 *a quartile is the v alue of the BOI where an ordered sample is div ided into f our equal-sized subgroups **a median is the v alue of the BOI in the middle of an ordered sampled where the sample is div ided into two equal-sized subgroups Table. The Business Outlook Index of Companies in Rivne Oblast and Its Components Balances of responses, % Expectations over next 12 months for Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Financial and economic standings 15.4 16.7 15.4 0.0 8.3 Total sales 0.0 30.8 15.4 7.7 0.0 Investment in construction 36.4 41.7 -9.1 -20.0 -30.0 Investment in machinery, equipment and tools 33.3 30.8 0.0 20.0 -9.1 Staff numbers -15.4 15.4 0.0 7.7 -16.7 2 This sample was generated in proportion to the contribution of each region and each economic activity to Ukraine’s gross value added. 3 Data for totals and components may be subject to rounding effects. 4 The business outlook index (BOI) is an aggregate indicator for expected business performance over the next 12 months. It is calculated using balances of respondents' responses regarding changes in the financial and economic standings of their companies and future economic activity. 3 Business Outlook Survey of Rivne Oblast Q2 2020 Figure 1 Figure 2 Output expectations for next 12 months, Assessment of consumer price drivers, percentage of responses percentage of responses 0 20 40 60 80 100 100 80 80 Exchange rate 60 60 Global prices 40 40 20 20 Household income 0 0 -20 -20 Production costs -40 -40 Supply (availability) of Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 money Output will decrease Output will be unchanged Output will increase Budgetary social spending Q2 20 Q1 20 Balance of expectations (right scale) Tax changes Figure 3 Figure 4 Economic activity as of the time of the survey, Staff level and wage cost expectations for next 12 balance of responses months, balance of responses 50 80 40 30 60 20 10 40 0 20 -10 -20 0 -30 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 -20 Financial and economic standings Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Finished goods stocks Staff level expectations Wage costs per staff member Unutilized production capacity Figure 5 Figure 6 Assessment of factors that impede output Expectations of producer prices for next 12 growth, percentage of responses months, balance of responses 0 20 40 60 100 High energy prices Insufficient production 80 capacity Weak demand 60 Lack of working assets High raw material and 40 supplies prices Tax burden 20 Qualified staff shortage Exchange rate fluctuations 0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Limited availability of loan Purchase prices Selling prices Political situation Per-unit production costs Corruption Q2 20 Q1 20 Regulatory burden 4 Business Outlook Survey of Rivne Oblast Q2 2020 Figure 7 Figure 8 Expectations of borrowing needs and intentions to Assessment of selling price drivers,