Chernivtsi Oblast Q1 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* * Q1 2020 This surveyI wasквартал carried 2018Q2 out 2018 рокуbefore quarantine measures were introduced *Надані результати*This survey є відображенням only reflects лишеthe opinions думки ofреспондентів respondents – in кері Chernivtsiвників підприємств oblast (top managersВінницької of companies) who were polled in Q1 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 Q1 2020 A survey of companies carried out in Chernivtsi oblast in Q1 2020 showed that respondents had moderate expectations that the Ukrainian economy would grow and that their companies would develop over the next 12 months. Respondents reported high level of inflation and 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 increase moderately: the balance of expectations was unchanged compared to the previous quarter, at 9.1% (Figure 1) and 10.4% across Ukraine ▪ prices for consumer goods and services would grow: 63.6% of respondents expected that inflation would not exceed 6.0% compared with 68.5% across Ukraine. Respondents referred to production costs as the main inflation driver (mentioned by 81.8% of respondents) (Figure 2) ▪ the domestic currency would depreciate: 45.5% of respondents expected the hryvnia to weaken against the US dollar (as in the previous quarter) compared with 65.2% across Ukraine ▪ their current financial and economic standings would improve more slowly: the balance of expectations was 9.1% compared to 20.0% in Q4 2019 and 16.9% across Ukraine (see Table) ▪ total sales would increase: the balance of responses was 9.1% (unchanged compared to the previous quarter), across Ukraine – 23.0%. External sales were expected to remain unchanged (such expectations have been reported for three quarters in a row): the balance of responses was 0.0%. Across Ukraine, respondents expected external sales to rise, the balance of responses being 17.5% ▪ investment in construction would increase: the balance of responses was 10.0% compared with 0.0% in the previous quarter. Investment in machinery, equipment, and tools was expected to remain unchanged: the balance of responses was 0.0% compared with (-11.1%) in Q4 2019. Overall, respondents expected investment spending to rise across Ukraine, the balances of responses being 2.4% and 14.1% respectively ▪ staff numbers would decrease at a faster pace: the balance of responses was (-20.0%) compared to (-9.1%) in Q4 2019 and (-3.9%) across Ukraine (Figure 4) ▪ the growth in purchase and selling prices would accelerate: the balances of responses were 72.7% and 63.6% respectively (compared with 63.6% and 45.5% in the previous quarter). Wage costs was cited as the main selling price driver (Figure 7) ▪ the growth in per-unit production costs and wage costs per staff member would speed up markedly: the balances of responses were 54.5% and 90.9% respectively (compared with 22.2% and 54.5% in Q4 2019) (Figures 4 and 6). High energy prices were mentioned as the main drag on the ability of the companies to boost production. The impact of raw material and supplies prices and regulatory burden strengthened noticeably (Figure 5). 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). A total of 90.9% respondents have reported having 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 good: the balance of responses was 9.1% (as in the previous quarter) and 9.7% across Ukraine. ▪ Stocks of finished goods decreased and were assessed to be at normal levels: the balance of responses was 0.0%) (compared with 20.0% in Q4 2019). ▪ Companies were operating on the verge of their production capacity: the balance of responses was 0.0% (compared with (-9.1%) in Q4 2019). 1 This survey was carried out before quarantine measures were introduced. 2 Business Outlook Survey Q1 2020 of Chernivtsi Oblast 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,% Agriculture Large (more Exporters only 18.2 than 250 18.2 Small (up to 50 Neither exporters Other persons) persons) nor importers 27.3 18.2 27.3 72.7 Manufacturing 9.1 Imports only 9.1 Transport and Energy and communications water supply 9.1 9.1 Wholesale and Construction Medium (from 51 and up retail trade 9.1 to 250 persons) 18.2 54.5 ▪ Period: 4 February through 4 March 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 Oblasts4, % Riv ne Oblast Voly n Oblast Chernihiv Oblast 126.1 103.1 Zhy tomyr 88.4 Sumy Oblast Oblast 105.7 126.4 Ky iv and Lv iv Oblast Ky iv Oblast 121.4 Poltav a Oblast Kharkiv Oblast Ternopil Oblast 113.1 107.4 111.3 138.9 Khmelny tskyi Cherkasy Luhansk Oblast Iv ano-Frankivsk Oblast Vinny tsia Oblast Zakarpattia Oblast 77.1 Oblast 104.9 Oblast 117.4 n/a 96.3 Donetsk 95.5 Cherniv tsi Oblast Kirov ohrad Oblast Dnipropetrov sk Oblast Oblast 101.6 84 107.5 n/a Zaporizhia My kolaiv Oblast Odesa 123.3 Oblast Oblast 114.6 113.1 Kherson Oblast 103.3 minimum 77.1 1 quartile 102.0 1 quarter 2 quartile (median) 107.5 Crimea 2 quarter 3 quartile 116.7 n/a 3 quarter maximum 138.9 4 quarter Ukraine 110.5 *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 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Financial and economic standings -20.0 18.2 20.0 20.0 9.1 Total sales 20.0 22.2 20.0 9.1 9.1 Investment in construction 40.0 0.0 22.2 0.0 10.0 Investment in machinery, equipment and tools 20.0 10.0 11.1 -11.1 0.0 Staff numbers -10.0 -18.2 -22.2 -9.1 -20.0 2 This sample was generated in proportion to the contribution of each oblast 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 development 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 Q1 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 Production costs 80 80 60 60 Household income 40 40 Exchange rate 20 20 Tax changes 0 0 Budgetary social Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 spending Output will decrease Output will be unchanged Output will increase Global prices Balance of expectations (right scale) Q1 20 Q4 19 Supply (availability) of money 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 20 100 10 80 0 60 -10 40 20 -20 0 -30 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 -20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 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 months, balance of responses 0 20 40 60 80 100 High energy prices Tax burden 80 Regulatory burden 60 High raw material and supplies prices Lack of working assets 40 Insufficient production capacity 20 Corruption Exchange rate fluctuations 0 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Weak demand Purchase prices Selling prices Limited availability of loan Per-unit production costs Qualified staff shortage Q1 20 Q4 19 Political situation 4 Business Outlook Survey of Chernivtsi Oblast Q1 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 80 100 50 Wage costs 40 Raw material and supplies prices Exchange rate 30 Energy prices 20 Tax burden 10 Demand 0 Loan rates Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Percentage of respondents who intend to take out loans Global prices Q1 20 Q4 19 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 Collateral requirements Complicated paperwork Uncertainty about ability to meet debt obligations as they fall due Q1 20 High loan rates Q4 19 Exchange rate fluctuations 5 .