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Pessimism at construction firms leads Ukrainian short-term business outlook index lower

Photo by Scott Blake / Unsplash

Ukrainian businesses remained slightly pessimistic about their short-term outlook for a second straight month in November, led by further deterioration of the outlook in the construction sector, according to the National Bank of Ukraine.

The central bank's monthly business activity expectations index fell to 49.1 in November from 49.6 in October. It was the second straight month below the neutral level of 50 after ending September at a slightly positive 50.1

"Hostilities and their repercussions, rising security risks, disrupted supply chains, somewhat limited electricity supply, higher electricity prices for businesses, tax changes, narrowing investment demand, and shortages of skilled workers, are continuing to dampen companies’ economic activity, while also negatively affecting their expectations," the central bank said.

Construction companies in Ukraine were more pessimistic about their short-term economic outlook than those in any other sector in the country, with the index for that sector dropping to 40.6 in November from 44.8 in October.

"Respondents expected a further drop in construction volumes, the number of new orders, and in purchases of raw materials and supplies," the central bank said. "Despite softening their views about the cost of contractor services, construction companies reported intentions to purchase less of these services. Respondents also remained downbeat about the availability of contractors. With significantly weaker expectations of slower growth in supplier prices, respondents declared intentions to cut their selling prices slightly."

Commerce was the only sector still positive in November, with that sector's index remaining above 50, at 50.9, but below the 53 registered in October.

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