IER released the Fifteenth monthly enterprise survey “Ukrainian business in wartime” for July 2023.
The monthly survey of enterprise managers is conducted by the Institute of Economic Research and Policy Consulting” (IER) 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).
The need for comprehensive information on the economic situation is crucial for economic policy in wartime. The Institute for Economic Research and Policy Consulting conducts a monthly enterprise survey using the Business Tendency Survey approach to quickly collect information on the current economic state at the enterprise level. The methodology is designed to assess the situation from the “base level”: the judgments and expectations of key economic agents such as entrepreneurs and business managers.
The monthly survey consists of two parts: the regular one and the special one.
Respondents regularly answer questions on the changes in key activity indicators and short-term forecasts for future changes in the same indicators. This entails the dynamics of output (production), sales, exports, debt, new orders, employment, etc. We also focus on estimates and expectations of the changes in the business climate and business activity at the enterprise in the next six months. This part of the survey applies the business tendency survey methodology, harmonized according to the Joint Harmonized EU Program of Business and Consumer Surveys (BCS) requirements.
The special part of the monthly enterprise survey is devoted to the war’s impact on the production activity of enterprises and exports and the assessment of government policy on business support. The industry dimension in data analysis is used in the issue.
Main results of the Fifteenth monthly enterprise survey:
- In July 2023, for the first time in the last three months, uncertainty in the long term decreased; instead, entrepreneurs became more cautious about the short and medium-term plans, where uncertainty gradually increased for the second month in a row.
- Estimates of the current business activity at the enterprise and the overall economic environment have slightly deteriorated, while expectations remain high.
- Compared to the previous months, production indicators slightly worsened, and expectations for three months, while remaining highly positive, tend to stagnate. Despite a slight decrease, the share of enterprises operating at full and near full capacity remains dominant.
- The importance of obstacles “unsafe to work” and “power supply cuts” remains significant for every third surveyed enterprise.
- Export activity has slowed, although companies have positive expectations for the next three months.
- Only a third of enterprises were able to increase the workers’ salaries from the beginning of 2023, on average, by 12%.
- The trend towards deterioration of economic policy assessments continues; positive assessment of the government’s economic policy has decreased, while the number of those who hesitate to answer has increased.