In January, businesses once again lowered their performance outlook, according to the National Bank of Ukraine.

The Business Activity Expectations Index (BAEI) for January 2025 was recorded at 41.0, matching the level of January 2024. Traditionally, in January, businesses tend to lower their assessments of current business activity compared to other months, which is influenced by seasonal factors.

This information is provided by the NBU, referencing the Business Activity Expectations Index (BAEI).

It is noted that the dynamics of the index were restrained by the following factors:

• a challenging security situation;
• a lack of investment in fixed capital;
• needs for energy resources and labor;
• increased production costs;
• inflationary and devaluation processes.

At the same time, the National Bank reported on business sentiment. According to the regulator:

• Industrial enterprises assessed their activities more cautiously due to the destruction of production capacities, lack of investments, labor shortages, and rising costs. The sector index in January stood at 42.0 (compared to 43.7 in 2024). Expectations regarding production volumes, new orders, and raw material stocks remain pessimistic.
• Trade enterprises began the year with a cautious assessment of business activity: the sector index was 40.0 (up from 38.9 in 2024). A decrease in turnover and purchases is expected; however, assessments of product inventories have improved. Margins remain under pressure.
• In the services sector, assessments weakened due to seasonal factors and rising costs: the sector index was 41.1 (up from 40.4 in 2024). Further reductions in service volumes and orders are anticipated.
• Construction enterprises expressed the most pessimistic outlook due to seasonality and labor shortages: the sector index was 37.2 (up from 31.9 in 2024). A decline in construction, orders, and purchases is expected, although the rate of increase in contractor service costs has slowed.

“In the industrial, construction, and services sectors, the proportion of respondents expecting price increases for their own goods and services has changed slightly. Meanwhile, in the trade sector, the share of enterprises forecasting price hikes for products sold has significantly decreased, partly due to seasonal sales,” the report states.

The NBU emphasizes that the labor market situation remains challenging. Respondents from all surveyed sectors were inclined to reduce their workforce, most significantly in construction. At the same time, service sector enterprises anticipated a slowdown in the rate of personnel reductions.

Background. Previously, Mind reported that Ukrainian businesses are gradually improving their assessments of their performance. The Business Expectations Index for enterprises (BEI) in Q4 2024 was 101.8%.