In March, businesses in all sectors were more optimistic about their performance and prospects.
This is evidenced by the Business Confidence Index (BCI), which the NBU calculates on a monthly basis.
In March 2023, the index rose to 49.5 from 45.0 in February, almost reaching the equilibrium level. This is the highest value since December 2021.
Trade enterprises provided the most optimistic assessments of their performance and prospects amid a recovery in consumer sentiment, improved energy supply, and increased supply of goods: the sectoral index rose to 53.6 in March from 47.0 in February, crossing the neutral level for the first time since November 2021.
Respondents significantly improved their expectations for turnover and purchases of goods for sale. At the same time, given the softening of estimates of purchase prices, they expected a slight decrease in trade margins.
The improved situation in the energy sector and the external environment, as well as the improvement in supply chains, had a positive impact on the assessments of industrial respondents. For the first time since February 2022, they expected an increase in their economic performance compared to the previous month: the sectoral index crossed the neutral level in March and stood at 51.2, up from 47.2 in February.
Respondents expected an increase in output and new orders for products, including exports. At the same time, pessimism in estimates of work in progress (unfulfilled orders) declined significantly, and expectations of growth in finished goods inventories weakened.
Due to the seasonal factor, construction companies significantly mitigated their negative assessments of their economic performance: the sectoral index in March was 45.9 (33.5 in February). Respondents expected an increase in purchases of contractor services and raw materials. At the same time, construction workers did not expect any changes in construction volumes and significantly reduced their negative assessments of new orders.
Despite the seasonal recovery, service companies had the most restrained assessments of their economic prospects: the sectoral index was 45.7, compared to 43.2 in February. Respondents somewhat softened, but maintained negative expectations regarding the volume of services provided, new orders, and the volume of services in progress. The majority of surveyed firms forecast a slowdown in the growth of purchase and contractor prices, as well as prices and tariffs for their own products/services.
Employment estimates remain restrained. Businesses in all sectors surveyed do not yet expect an increase in the total number of employees. The least pessimistic estimates were made by trade enterprises.