The Institute for Economic Research and Policy Consulting (IER) conducted the fifth issue of the Monthly Enterprises Survey "Ukrainian business in wartime" for September 2022. The project aims to collect rapidly information on the current economic state at the enterprise level.
The results of the Survey showed a significant improvement in business production expectations. The share of enterprises where production is expected to grow rose from 26.5% in August to 40.0% in September. However, the percentage of those planning to reduce production remained almost unchanged at 7.8% (7.7%).
In September, business uncertainty increased over the long-term and short-term uncertainty decreased, making it easier for entrepreneurs to forecast their activities over the next three months. In particular, the share of those interviewed, who were unable to provide a forecast of changes in the financial and economic situation of enterprises for a six-month period, increased from 29.0% to 34.4%, and for the general economic environment of the country - from 33.2% to 36.7%.
Enterprises continue to return production to pre-war levels. In September, the share of enterprises with an almost complete production volume rose from 36% in August to 41% in September. (17% in May and 30% in June).
The rate of sales and new orders also decreased. Survey respondents saw their new orders drop from 21.2% in August to 20.3% in September. The percentage for which the number of orders has risen is from 17.6% to 21.7%. The share of those enterprises in which sales declined in September compared to August decreased from 24.4% to 22.5%. And the percentage whose sales nearly doubled, rising from 14.8% to 24.1%.
At the same time, in the forecast for the growth in the number of business employees shows prudence. The percentage of surveyed contractors who believe the number of employees will grow has decreased from 9.0% to 6.7%. Nevertheless, the proportion of those expecting a decrease in the number of employees decreased less substantially from 4.6% to 3.1%.
Business export activity continues to recover and optimism about the future is increasing. The share of exporters who have not yet resumed their overseas sales fell to 16% (20% in August, 27% in July, 40% in June and 47% in May). The main problems for exporters in September are queues at the western borders of Ukraine: this was indicated by 60% of respondents in September (32% in May), the inability to export by sea – 44% (in May 27%) and complicated customs formalities – 40% (in May 17%).
Increase in raw material prices (63%), difficulties in transporting raw materials/goods across the territory of Ukraine (41%) and lack of circulation funds continue to lead the list of barriers to doing business (37%).
For the third consecutive month, the proportion of positive evaluations of government policy on business support remains low and unchanged, but in September, the balance sheet improved because of a decline in the share of companies that negatively assess the state policy. In particular, the majority of respondents (57%) felt that government policy to support business was neutral. About one in five (22%) evaluate this policy negatively, and one in ten (10%) - positively.
The survey is conducted using the Business Tendency Survey approach, when the assessment of the situation is based on generalized judgments and expectations of the main economic agents - entrepreneurs and business leaders about the situation in their company.
Monthly Enterprises Survey was prepared as part of the project "For Fair and Transparent Customs", funded by the European Union and co-financed by the International Renaissance Foundation, and the ATLAS Network (USA). Its content is the responsibility of the Institute for Economic Research and Policy Consulting and does not necessarily represent the position of the European Union, the Renaissance Foundation, or the ATLAS Network.
