The Business Activity Recovery Index (BARI) continued its decline and fell to zero in November. Capacity utilization reached another minimum: the average term for new orders of enterprises shortened to 3.6 months. Business assessments of the government's economic policy remain predominantly neutral, while the share of negative ratings rose to 24%.
The BARI has been deteriorating for the third consecutive month, decreasing from 0.03 to zero in November. The BARI value for micro-enterprises is the lowest. There was also a deterioration in the indicators for large and medium enterprises, while small enterprises saw an improvement.
There is a continuing trend of decreasing capacity utilization compared to "pre-war times." The share of enterprises working at full capacity decreased from 6% to 5%, and the share of those working at 75–99% capacity decreased to 57%.
Export expectations also worsened: only 37.6% of enterprises forecast export growth in the coming months, compared to 46.6% in October. Expectations regarding changes in both sales and new orders are also declining.
"Enterprises are already feeling a lack of new orders. The average term for new orders shortened from 4.1 months in October to 3.6 months in November. The share of those working 'from the wheels' (immediate fulfillment) increased from 21% to 29%," said Oksana Kuziakiv, IER Executive Director.
New orders portfolio
Inflationary pressure has stabilized. In November, 44.9% of enterprises expected further price increases for raw materials (46.8% in October), and 43.6% expected an increase in prices for finished products (46% in October).
Assessments of the government's economic policy remain mostly neutral (65%). However, in November, the share of enterprises that negatively evaluate the government's economic policy increased by 3 percentage points to 24%. The share of positive ratings has remained unchanged for three months at 4%.
About the Survey. The New Monthly Enterprises Survey (#NRES) by the IER involves up to 500 Ukrainian industrial enterprises located in 21 out of 27 regions of Ukraine. The survey has been conducted on a monthly basis since May 2022. These surveys are part of the project "Integration of Ukraine into the EU: Evidence-Based Dialogue," supported by the International Renaissance Foundation.
Video Presentation (in Ukrainian). Watch the presentation of the November survey results here: https://www.youtube.com/watch?v=FtHOBDx3Zwk&t
Access all previous surveys since July 2022 at: http://www.ier.com.ua/en/proekt_dilova_dumka/NRES_Presentations
