Results of surveysBusiness of Vinnits Outlooka regionSurvey * enterprises managersof Kirovohrad regarding Oblast their business expectations *
I квартал 2018Q року2 20 20 This survey was conducted after the government
announced it would relax the quarantine
*Надані результати*This є survey відображенням only reflects лише the opinions думки респондентів of respondents – inкерівників Kirovohrad підприємств oblast (top manageВінницькоїrs of області в IІ кварталіcompanies) 2018 року who і wereне є прогнозамиpolled in Q2 та20 20оцінками, and does Національного not represent банку NBU forecastsУкраїни. or estimates
Business Outlook Survey of Kirovohrad Oblast Q2 2020
A survey of companies carried out in Kirovohrad oblast in Q2 2020 showed that respondents expected a drop in the output of Ukrainian goods and services and weaker performance of their companies over the next 12 months on the back of the quarantine. Respondents expected that prices would increase. Depreciation expectations softened.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 (-30.8%) compared to (-18.2%) in Q1 2020 and (-34.1%) across Ukraine (Figure 1)
. prices for consumer goods and services would grow: 53.8% of respondents expected the inflation rate to be lower than 7.5% (compared with 54.9% across Ukraine). Respondents referred to production costs as the main inflation driver (Figure 2)
. the domestic currency would gradually depreciate more slowly : 46.2% of respondents (compared with 50.0% in the previous quarter) expected the hryvnia to weaken against the US dollar, with a figure of 68.2% across Ukraine
. the financial and economic standings of their companies would deteriorate: the balance of expectations was (-15.4%) compared with (-8.3%) in the previous quarter and (-1.8%) across Ukraine (see Table)
. total sales would decrease: the balance of responses was (-23.1%) compared with (-16.7%) in the previous quarter. Respondents also expected a decrease in external sales (the balance of responses was (-25.0%) compared with 0.0% in Q1 2020). Overall, companies across Ukraine expected sales to decrease only slightly, the balances of responses being (-0.1%) and (-0.7)% respectively
. investment both in construction and in machinery, equipment and tools would decrease: the balances of responses were (-38.5%) and (-30.8%) respectively (compared to (-37.5%) and (-9.1%) in Q1 2020). Across Ukraine, the balances of responses were (-16.1%) and (-10.5%) respectively
. staff numbers at their companies would drop noticeably: the balance of responses was (-41.7%) compared with (- 8.3%) in Q1 2020 and (-17.3%) across Ukraine (Figure 4)
. both purchase and selling prices would rise at a faster pace: the balances of responses were 76.9% and 38.5% respectively (compared to 50.0% and 16.7% in Q1 2020) (Figure 6). Respondents cited raw material and supplies prices as the main selling price driver. The impact of domestic competition strengthened noticeably (Figure 7).
. per-unit production costs and wage costs per staff member would increase at a slower pace: the balance of responses was 30.8% for each (compared with 36.4% and 50.0% in Q1 2020) (Figures 6 and 4).
The political situation and weak demand were cited as the main drags on the ability of companies to boost production. The impact of weak demand strengthened noticeably (Figure 5). Respondents lowered their expectations of an increase in borrowing needs in the near future (Figure 8). The respondents who planned to take out corporate loans (38.5% of respondents) usually opted for domestic currency loans. Respondents said that lending standards had remained unchanged (Figure 9). Respondents continued to cite high loan rates as the main factor that deterred them from taking out loans (Figure 10). The impact of uncertainty about ability to meet debt obligations as they fall due strengthened noticeably 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 had been assessed as bad for three quarters in a row: the balance of responses was (-23.1%) compared with (-8.3%) in Q1 2020 and (-11.6%) across Ukraine. . Finished goods stocks had increased and were assessed at a level higher than the normal one: the balance of responses was 12.5% compared with 0.0% in Q1 2020.
. Companies were operating on the verge of their production capacity: the balance of responses was 0.0% compared with 16.7% in Q1 2020.
1 This survey was conducted after the government announced it would relax the quarantine
2 Business Outlook Survey of Kirovohrad 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,% Other Exporters only 7.7 Transport and Large (more 15.4 Small (up to 50 communications Agriculture than 250 Neither exporters persons) 7.7 38.5 persons) nor importers 46.2 23.1 61.5 Imports only 7.7 Wholesale and retail trade Both exporters 23.1 and importers 15.4
Medium (from 51 and up Mining to 250 persons) Manufacturing 7.7 30.8 15.4 . Period: 5 through 29 May 2020. . A total of 13 companies were polled. . A representative sample was generated on the basis of the agricultural sector.
Business outlook index for next 12 months in terms of regions,% Business Outlook Index for Next 12 Months in Terms of 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 Kirovohrad 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 0.0 31.3 -7.1 -8.3 -15.4
Total sales 20.0 18.8 -20.0 -16.7 -23.1
Investment in construction -7.1 -35.7 -28.6 -37.5 -38.5
Investment in machinery, equipment and tools 0.0 -13.3 7.1 -9.1 -30.8
Staff numbers -20.0 -25.0 -33.3 -8.3 -41.7
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 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 Kirovohrad Oblast Q2 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
80 80 Production costs
60 60 Exchange rate 40 40
20 20 Household income 0 0
-20 -20 Global prices
-40 -40 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Supply (availability) of Output will decrease money Output will be unchanged Output will increase Tax changes Balance of expectations (right scale) Q2 20 Q1 20
Budgetary social spending
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 30 60 20 40 10 20 0 0 -10
-20 -20
-40 -30 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 -60 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 Political situation
Weak demand 80
Lack of working assets 60 Qualified staff shortage
High raw material and 40 supplies prices
Exchange rate fluctuations 20 Tax burden
High energy prices 0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Insufficient production capacity Purchase prices Selling prices Corruption Per-unit production costs
Regulatory burden Q2 20 Q1 20 Limited availability of loan
4 Business Outlook Survey of Kirovohrad Oblast Q2 2020
Figure 7 Figure 8
Expectations of borrowing needs and intentions to Assessment of selling price drivers, take out corporate loans in the near future, percentage of responses percentage of responses 0 20 40 60 60 60 Raw material and supplies prices 45 45 Exchange rate
Energy prices 30 30
Domestic competition
15 15 Wage costs
Demand 0 0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Global prices Percentage of respondents who intend to take out loans Borrowing needs (balance of responses, right scale) Loan rates Q2 20 Q1 20
Tax burden
Figure 9 Figure 10
Expectations of lending conditions for next 12 Assessment of factors that could deter months, balance of responses* companies from taking out loans, percentage of responses 0 0 20 40 60 80
High loan rates -10
Uncertainty about ability to meet debt obligations as they fall due -20 Collateral requirements
-30 Other funding sources Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 *The dif f erence between the percentages of responses “tightened” and “eased” Q2 20 Exchange rate fluctuations Q1 20
Complicated paperwork
5