Businesses Upgrade Their Expectations for Their Economic Performance – Business Outlook Survey in February

Although improving, respondent’s assessments of their February economic performance remained guarded and below the neutral level. Rebounding domestic demand, stepped-up production and an increase in the supply of goods positively affected expectations across all sectors. At the same time, continued missile attacks on critical infrastructure, higher business costs for labor, heating, and electricity in winter, labor shortages and inflation remained constraining factors.

This is evidenced by the business activity expectations index (BAEI), which the NBU calculates on a monthly basis, apart from the forced break in March–May 2022. In February 2025, the BAEI was 46.9, compared to 41.0 in January 2025 and 47.5 in February 2024.

Industrial companies reported the most optimistic economic outlook, thanks to reviving consumer demand and stepped-up production, the sector’s index being 50.2 in February (above the neutral level), compared to 42.0 in January 2025 and 48.3 in February 2024. Respondents expected an increase in manufactured goods and the number of new orders for products, including export orders. They also softened their cautious expectations for unfinished goods, finished goods stocks, and stocks of raw materials and supplies.

Trading companies significantly improved their performance expectations on the back of rebounding domestic demand and the sufficient supply of goods, the sector’s index being 49.2 in February, compared to 40.0 in January 2025 and 50.1 in February 2024. Respondents were more upbeat about their trade turnovers. In contrast to the two previous months, trading companies were optimistic about their stocks of goods for sale and about purchases of goods for sale. As before, respondents continued to declare intentions to cut their trade margins.

Although improving noticeably, construction companies’ expectations for their economic performance remained guarded, due to the seasonal nature of construction work, a significant cold spell and labor shortages, the sector’s index being 44.7 in February, compared to 37.2 in January 2025 and 43.7 in February 2024. In contrast to the three previous months, respondents expected an increase in purchases of raw materials and supplies, and in contractor services. Respondents improved their expectations about construction volumes and the number of new orders. Conversely, companies remained downbeat about contractor availability and the cost of contractor services.

Services companies improved their expectations slightly, but still reported the most guarded performance expectations of all sectors, on the back of shortages of qualified staff and higher business costs for labor, heating and electricity in winter, the sector’s index being 42.2 in February, compared to 41.1 in January 2025 and 45.3 in February 2024. Compared to last month, respondents were more upbeat about the amount of services provided, the number of new orders for services, and about the amount of services that are being provided.

Companies across all surveyed sectors declared less firm intentions to raise their selling prices amid slower growth in purchase prices.

Labor market conditions improved slightly. Respondents across most of the surveyed sectors reported intentions to reduce their workforces more slowly. Only services companies said they intended to cut their staff at a slightly faster pace.