Chernivtsi Oblast Q3 2020
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ResultsРезультати of surveys Business опитувань of VinnitsaOutlook керівників regionSurvey enterprises підприємств managers м.of ChernivtsiКиєва regarding і Київської Oblast their * області щодоbusiness їх ділових expectations очікувань* * Q3 2020 I квартал 2018Q2 2018року *Надані результати*This survey є відображенням only reflects лишеthe opinions думки ofреспондентів respondents – in керівників Chernivtsi підприємств oblast (top managersВінницької of companies) who were polled in Q3 2020, and does not represent NBU forecasts or estimates області в IІ кварталі 2018 року і не є прогнозами та оцінками Національного банку України. Business Outlook Survey of Chernivtsi Oblast Q3 2020 A survey of companies carried out in Chernivtsi oblast in Q3 2020 showed that respondents expected the output of Ukrainian goods and services to decrease more slowly over the next 12 months amid the adaptive quarantine regime. At the same time, they had positive expectations for the performance of their companies. Respondents reported moderate inflation expectations. Depreciation expectations were high. The top managers of companies said they expected that over the next 12 months: ▪ the output of Ukrainian goods and services would drop at a slower pace: the balance of expectations was (-9.1%) compared with (-27.3%) in Q2 2020 (Figure 1) and (-16.1%) across Ukraine ▪ prices for consumer goods and services would grow moderately: a total of 81.8% of respondents expected that inflation would not exceed 7.5% compared with 54.5% in the previous quarter and 55.6% across Ukraine. Respondents referred to production costs as the main inflation driver (Figure 2) ▪ the domestic currency would depreciate significantly: 90.0% of respondents (compared with 54.5% in the previous quarter) expected the hryvnia to weaken against the US dollar, the figure across Ukraine being 83.2% ▪ the financial and economic standings of their companies would improve: the balance of expectations was 9.1% compared with 0.0% in Q2 2020 and 4.4% across Ukraine (see Table) ▪ total sales would increase: the balance of responses was 9.1% compared with (-27.3%) in Q2 2020. External sales were expected to remain unchanged, the balance of responses being 0.0% compared with (-66.7%) in Q2 2020. Overall, companies across Ukraine expected sales to increase, the balances of responses being 9.8% and 4.3% respectively ▪ investment in construction would remain unchanged: the balance of responses was 0.0% compared to (-10.0%) in the previous quarter. Investment in machinery, equipment and tools was expected to decrease: the balance of responses was (-10.0%) compared with (-20.0%) in the previous quarter. The balances of responses across Ukraine were (-4.7%) and 5.2% respectively ▪ staff numbers would decrease: the balance of responses was (-10.0%) compared to (-9.1%) in Q2 2020 and (-10.8%) across Ukraine (Figure 4) ▪ both purchase and selling prices would rise slightly: the balances of responses were 45.5% and 36.4% respectively (compared with 70.0% and 27.3% respectively in Q2 2020) (Figure 6). Wage costs and energy prices were referred to as the main selling price drivers (the impact of these factors was reported to have increased) (Figure 7) ▪ per-unit production costs would grow: the balance of responses was 54.5% (as in the previous quarter) and 36.4%, respectively, compared with 54.5% and 90.9% in Q2 2020. Wage costs per staff member were expected to increase at a significantly faster pace: the balance of responses was 81.8% (36.4% in the previous quarter) (Figures 4 and 6). A lack of working assets and qualified staff shortages were mentioned as the main drags on the ability of the companies to boost production (the impact of these factors was reported to have increased) (Figure 5). The impact of companies’ limited ability to take out loans strengthened noticeably. The companies that planned to take out corporate loans opted for domestic currency loans only. Other funding sources were cited as the main deterrent to taking out corporate loans (Figure 9). 90.9% of the respondents reported that they had encountered no difficulties in effecting transactions with funds deposited in bank accounts (96.6% 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% compared with (-18.2%) in the previous quarter. Across Ukraine, the current financial and economic standings of companies were assessed as bad, the balance of responses being (-5.6%). ▪ Finished goods stocks had decreased significantly and were assessed to be at a normal level: the balance of responses was 0.0% compared with 50.0% in Q2 2020 ▪ Companies had a sufficient amount of unutilized production capacity to meet any unexpected rise in demand: the balance of responses was 27.3% compared to 9.1% in Q2 2020. 2 Business Outlook Survey Q3 2020 of Chernivtsi Oblast Survey Details1,2 Respondents in terms of business Respondents in terms of main economic Respondents in terms of enterprise size based activities,% activities, % on staff number, % Small (up to 50 Other Exporters only Large (more persons) 18.2 Agriculture Neither exporters 18.2 than 250 9.1 18.2 nor importers persons) Transport and 72.7 communications 18.2 9.1 Manufacturing Both exporters 9.1 and importers 9.1 Energy and Wholesale and water supply retail trade 9.1 Medium (from 51 and up 18.2 Construction to 250 persons) 18.2 72.7 ▪ Period: 5 through 28 August 2020. ▪ A total of 11 companies were polled. ▪ No economic activity was able to generate a representative sample. Business outlook index for next 12 months in terms of regions,% Business Outlook Index for Next 12 Months in Terms of Oblasts3, % Riv ne Oblast Voly n Oblast Chernihiv Oblast 95.9 102.9 Zhytomyr 103.9 Sumy Oblast Oblast 109 111.4 Ky iv and Lviv Oblast Ky iv Oblast 107.2 Poltav a Oblast Kharkiv Oblast Ternopil Oblast 105.1 98.6 106.3 119.3 Khmelny tskyi Cherkasy Luhansk Oblast Iv ano-Frankivsk Oblast Vinny tsia Oblast Zakarpattia Oblast 79.2 Oblast 113.2 Oblast 92.4 no data 105.3 Donetsk 94.5 Cherniv tsi Oblast Kirov ohrad Oblast Dnipropetrov sk Oblast Oblast 99.6 74.7 97.1 no data Zaporizhia My kolaiv Oblast Odesa 84.6 Oblast Oblast 91.2 90.1 Kherson Oblast 106.9 minimum 74.7 1 quartile 93.0 1 quarter 2 quartile (median) 101.3 Crimea 2 quarter 3 quartile 106.8 no data 3 quarter maximum 119.3 4 quarter Ukraine 100.8 *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 Chernivtsi Oblast and Its Components Balances of responses, % Expectations over next 12 months for Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Financial and economic standings 20.0 20.0 9.1 0.0 9.1 Total sales 20.0 9.1 9.1 -27.3 9.1 Investment in construction 22.2 0.0 10.0 -10.0 0.0 Investment in machinery, equipment and tools 11.1 -11.1 0.0 -20.0 -10.0 Staff numbers -22.2 -9.1 -20.0 -9.1 -10.0 1 This sample was generated in proportion to the contribution of each oblast and each economic activity to Ukraine’s gross value added. 2 Data for totals and components may be subject to rounding effects. 3 The business outlook index (BOI) is an aggregate indicator for expected business performance over the next 12 months. It is calculated using the balances of respondents' responses regarding changes in the financial and economic standings of their companies and future economic activity. 3 Business Outlook Survey of Chernivtsi Oblast Q3 2020 Figure 1 Figure 2 Output expectations for next 12 months, Assessment of consumer price drivers, percentage of responses percentage of responses 100 100 0 20 40 60 80 100 80 80 Production costs 60 60 Exchange rate 40 40 20 20 Household income 0 0 -20 -20 Global prices -40 -40 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Tax changes Output will decrease Output will be unchanged Output will increase Budgetary social Balance of expectations (right-hand scale) spending Q3 20 Q2 20 Supply (availability) of money Figure 3 Figure 4 Companies' economic activity as of the time of the Staff level and wage cost expectations for next 12 survey, balance of responses months, balance of responses 60 100 45 80 30 60 15 40 0 20 0 -15 -20 -30 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 -40 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Financial and economic standings Staff level expectations Wage costs per staff member Finished goods stocks 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 80 Lack of working assets Qualified staff shortages 60 High energy prices Exchange rate fluctuations 40 Weak demand Tax burden 20 Limited availability of loan Corruption 0 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Political situation Purchase prices Q3 20 Selling prices Regulatory burden Q2 20 Per-unit production costs High raw material and supplies prices Insufficient production capacity 4 Business Outlook Survey of Chernivtsi Oblast Q3 2020 Figure 7 Figure 8 Expectations of intentions to take out corporate Assessment of selling price drivers, loans in the near future, percentage of responses percentage of responses 0 20 40 60 80 60 Wage costs Energy prices 45 Exchange rate 30 Raw material and supplies prices Demand 15 Tax burden 0 Global prices Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Loan rates Percentage of respondents who intend to take out loans Q3 20 Q2 20 Domestic competition Figure 9 Assessment of factors that could deter companies from taking out loans, percentage of responses 0 20 40 60 Other funding sources High loan rates Collateral requirements Complicated paperwork Uncertainty about ability to Q3 20 meet debt obligations as Q2 20 they fall due Exchange rate fluctuations 5 .