Quarterly Enterprise Survey

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Starting from July 2002 the Institute for Economic Research and Policy Consultations (IER) continues this survey, which has been originally launched in 1996 and covers 300 enterprises, randomly chosen in Southern, Western, Eastern and Central Ukraine.

The survey belongs to the group of business tendency surveys and follows a methodology developed at the IFO institute in Munich, Germany. Such surveys are a meaningful supplement to standard economic statistics as they provide insights concerning perceptions and expectations of economic agents. In many countries, such information is widely used by economic analysts, policy-markers and businessmen alike in order to obtain a clearer picture on current performance and to forecast changes in the short- and medium term run.

The main objective of the Survey is to indicate the influence of economic policy on business development though monitoring perceptions and expectations of managers regarding changes in general economic conditions (business-, regulatory- and lending climate), production (e.g. output performance, impediments to production, employment) and financial performance at the firm level (e.g. prices, profitability, arrears).

The Survey performs two main functions

• to supplement present quantitative statistics with qualitative information.

• to provide forecasts for future developments based on expectations

The output of the Survey is a quarterly report (QES), which is distributed by the IER.

In short, this survey provides another fundamental piece to the overall picture of current economic performance in Ukraine. We are convinced that our report will find your satisfaction and look forward to hearing further comments and suggestions (responsible person is Oksana Kuziakiv)

Quarterly Enterprise Survey
Special issue No 7
October 2007

• The number of exporting enterprises has grown, and the export dimensions became more diversified.

• Customs barriers and reluctance of prospective partners to cooperate with Ukrainian business because of unfavorable economic environment are the main obstacles for the development of foreign economic activity of enterprises.

• The past tendency of increase only one direction of the economic integration of Ukraine is cut. The rise of the number of followers the both East and West integration directions is observed.

• The share of the respondents that consider positive impact of WTO assessing on economic growth has increased.

Quarterly Enterprise Survey (51kb)

Quarterly Enterprise Survey
Special issue No 6
October 2006

• ANNUAL INDICATOR OF BUSINESS ENVIRONMENT BURDEN has increased to 51.0 in 2006 from 47.5 in 2005;

• The number of managers perceive property rights to be insecure has increased;

• The share of managers consider regulations unclear: remains at level of 2005: 79.8%;

• The "time tax has decreased from 14.8% to 11.2% of working time;

• The share of respondents reported the bribe to be a common instrument to get "things done" has decreased from 76.8% in 2004 to 34.0% in 2005

• In 2006 share of all firms pay bribes to get "things done increased again and reached to 55.1%";

• In 2006 the average size of bribes has grown again and reached an average 3.4% of annual sale

• The amount of the bribes increase over time and became more stable again in 2006;

• About 63.5% of all firms are unsure about the efficacy of corruption;

• 72,0% of surveyed managers are sure that "friendly relations" with state need to get success in business;

• After significant increase in 2005, the rate of tax compliance has decreased again in 2006;

Quarterly Enterprise Survey (116kb)

Quarterly Enterprise Survey
No. 16
May 2006

• Industrial confidence indicator increased form -0.12 in January to -0.01 in May.

• The managers' expectations about future changes in the business climate improved slightly.

• The slow-down of production in the 1st quarter was higher than expected by managers.

• Managers expect a significant growth of production in the 2nd quarter.

• Managers expect an increase in new orders in the 2nd quarter.

• Banks became less willing in the 1st quarter to provide long terms loans.

• The percentage of firms considering the regulatory climate to be an impediment to production has slightly increased.

• During the 2nd quarter managers expect a slow down in increase of purchase and sale prices.

Quarterly Enterprise Survey (68kb)

Quarterly Enterprise Survey
Special issue No 4
January 2006

• In recent years appeared a tendency of growing of presence of Ukrainian enterprises on the international markets

• The main obstacles for the development of foreign economic activity of enterprises include customs barriers and high prime cost of production.

• Ukrainian exporters became more attractive partners comparing to previous years.

• There is a tendency of reduction of the number of enterprises that choose integration with Russia, while the number of adherents of economic integration with the EU states increased in recent years.

• Almost the same is the situation with Ukraine's accession to regional organizations. The number of adherents of WTO accession increased in recent years, while the number of SES adherents reduced.

• The number of adherents of EU accession decreased.

Quarterly Enterprise Survey (40kb)

Quarterly Enterprise Survey
Special issue No 3
December 2005

• At the beginning of 2005 business expected from the new authorities Complex and consistent measures aiming at (1) enhance the predictability of the business environment, (2) reduce social taxes and (3) establish equal rules of the game for all.

• The beginning of the 2005 the business confidence to new Authority was the greatest and it reflected to significant increase in business optimism

• In April the share of respondents expected improvement of business climate in the next half of a year amounted 29,8%

• In April firms planned to increase their production: 51,0% of respondents planned to increase their volume of production in the next 3-4 months

• Business optimism significantly decreased in the second half of a year. In August the percent of respondents expected positive changes in business climate in the next half of a year amounted only 8,3%.

• Decrease in business optimism also influenced on production plans of enterprises, which were lower, than they could be with regard to the fact, that at the middle of the year one can usually observe the peak of business activity

• But former "optimists" did not become "pessimists". The majority of managers (76,9%) expect neither positive nor negative changes in business environmental during next six months.

Quarterly Enterprise Survey (68kb)

Quarterly Enterprise Survey
No. 13
September 2005

• The Industrial Confidence Indicator decreased from 0.01 in May to 0.06 in September.

• The managers' business climate expectations deteriorated considerably.

• Production growth in the 2nd quarter was as managers had expected.

• In the 3rd quarter, managers predict a slowdown of production growth.

• In the 3rd quarter, managers do not expect any increase in the number of new orders.

• In the 2nd quarter willingness of banks to provide credits did not change, whereas credits became more affordable for firms.

• The share of managers considering the regulatory climate to be impediment to production has decreased.

• In the 3rd quarter managers expect the growth of input prices and sales prices but at lower rates than in the 2nd quarter.

Quarterly Enterprise Survey (107kb)

Quarterly Enterprise Survey
No. 12
May 2005

• Industrial confidence indicator increased form -0.16 in January to 0.01 in May.

• The managers' expectations about future changes in the business climate improved significantly.

• The slow-down of production in the 1st quarter was lower than expected by managers.

• Managers expect a significant growth of production in the 2nd quarter.

• Managers expect an increase in new orders in the 2nd quarter.

• Banks became wore willing in the 1st quarter to provide loans and affordability of loans for firms continued deteriorating.

• The percentage of firms considering the regulatory climate to be an impediment to production remained without change after significant reduction in January.

• During the 2nd quarter managers expect a continued increase of purchase and sale prices.

Quarterly Enterprise Survey (107kb)

Quarterly Enterprise Survey
No. 10
November 2004

• The Industrial Confidence Indicator decreased from -0.05 in July to -0.07 in October.

• The managers' expectations about future changes in the business climate sharply decreased.

• As expected by the managers, decreases in production have been recorded during the 3rd quarter.

• Managers expect continued production increases during the 4thquarter, but less so than during the 3rd quarter.

• In the 4th quarter managers expect demand growth to slow down.

• The accessibility and affordability of short and long term loans have deteriorated.

• Lack of raw materials became important impediment to production growth.

• During the 4th quarter managers expect continuing purchase and sale prices increases.

Quarterly Enterprise Survey (95kb)

Quarterly Enterprise Survey
No. 9
September 2004

• The Industrial Confidence Indicator decreased from -0.01 in May to -0.05 in July.

• The managers' expectations about future changes in the business climate became more optimistic.

• As expected by the managers, significant increases in production have been recorded during the 2nd quarter.

• Managers expect continued production increases during the 3rd quarter, but less so than during the 2nd quarter.

• In the 3rd quarter managers expect demand growth to slow down.

• The accessibility and affordability of short and long term loans have improved.

• Competitive pressures have increased significantly.

• During the 3rd quarter managers expect continuing purchase price increases. Sales prices are expected to increase too.

Quarterly Enterprise Survey (174kb)

Quarterly Enterprise Survey
No. 8
May 2004

• The Industrial Confidence Indicator increased from -0.17 in February to -0.01 in May.

• The managers' expectations about future changes in the business climate remain rather pessimistic.

• The slowing of business activity recorded in the 1st quarter of 2004 was less than that in the 1st quarter of 2003.

• For the 2nd quarter of 2004 managers expect significant increases in production.

• After decreasing in February, tax pressures are again in first place on the list of impediments to production.

• Loans again became less accessible and affordable.

• Managers informed about increased competitive pressures.

• Prices increased to a greater extent than managers had expected.

• During the 2nd quarter managers expect continuing purchase price increases. Sales prices are expected to grow too, but to a lesser extend than purchase prices.

Quarterly Enterprise Survey (110kb)

Quarterly Enterprise Survey
No. 7
February 2004

• The Industrial Confidence Indicator decreased from –0.04 in the 3rd quarter to -0.17 in the 4th quarter.

• The managers’ assessments of the current overall business situation as well as expectations about future changes in the business situation have deteriorated.

• A significant increase in the production index for small firms (from 0.17 to 0.31) was recorded for the first time.

• For the 1st quarter 2004, managers expect the usual seasonal slowdown of business activity: the production expectations for the 1st quarter 2004 are close to zero.

• The rankings of impediments to production growth have changed: low demand and unfriendly regulations increased in importance, while tax pressures decreased.

• The frequency of one impediment to production growth, namely “frequent changes to the economic legislation”, has dramatically increased from 3.4% in October to 27.3% in February.

• The affordability of short-term loans has increased, while that of long-term loans, which reached its highest level in October 2003, has remained without significant change.

• Increasing purchase prices continue to alarm managers: the index of purchasing price expectations increased during the 1st quarter 2004. Sales prices are expected to grow too.

Quarterly Enterprise Survey (112kb)

Quarterly Enterprise Survey
No. 6
November 2003

• The Industrial Confidence Indicator increased from -0.08 in the 2nd quarter to -0.04 in the 3rd quarter.

• While the managers' assessments of overall business conditions have improved, their forecasts of future business conditions became more pessimistic.

• Managers consider that the growth of domestic demand and their positive production expectations for the 3rd quarter were fully met.

• The production expectations for the 4th quarter continue to be positive.

• 11 out of 13 possible impediments to production growth have declined in importance.

• Tax pressures, low demand, and unfriendly regulations are the main impediments to production growth.

• The affordability of long-term loans has increased significantly.

• Growing purchasing prices alarm managers: the index of purchasing price expectations increased during the 4th quarter.

Quarterly Enterprise Survey (193kb)

Quarterly Enterprise Survey
Special issue No 2
October 2003

• Most Ukrainian industrial MEs (medium-sized enterprises) originated as a result of privatisation and downsizing of former state enterprises.

• Contrary to their western counterparts, Ukrainian MEs are mainly represented by joint-stock companies (JSCs) with a high potential for corporate governance problems.

• Small businesses (SEs) do not represent a significant source of medium-sized sector development due to problems with incentives and opportunities for growth.

• Half of the SEs consider that loosing their tax privileges and simplified accounting are disincentives for growing beyond their size group.

• 19% of the MEs consider using simplified taxation schemes in their growth plans.

• ME investment activity is rather low and they consider a lack of profits to be an impediment to investment more often than do the SE and LE (large enterprise) groups.

• The share of profitable firms is lowest among MEs.

• The ME restructuring activities and their dynamics of performance show a "staying-in-the-middle" approach.

• MEs report a lower level of security of property rights than do SEs and LEs.

• The larger the firm the more it believes it to be important for business success to maintain informal relations with representatives of the public authorities.

• MEs consider uncertainty of corruption outcomes more likely than do the other size groups.

• In 2003, MEs have the lowest share of firms with tax arrears compared to SEs and LEs.

Quarterly Enterprise Survey (526kb)

Quarterly Enterprise Survey
No. 5
August 2003

• The manager's expectations regarding the overall business climate for the next six months have improved.

• The Industrial Confidence Indicator decreased from 0.03 in the 1st quarter to -0.07 in the 2nd quarter.

• The positive production expectations for the 2nd quarter have almost been met.

• The production expectations for the 3rd quarter remain positive, but are more pessimistic than those for the 2nd quarter.

• Managers anticipate some deceleration of domestic demand growth in the 3rd quarter.

• The willingness of banks to provide loans has increased. The affordability of loans has not changed significantly.

• Low demand, tax pressure, and unfriendly regulations are the main impediments to production growth.

• The indices for sales/purchasing price expectations remain without significant changes in the 3rd quarter.

Quarterly Enterprise Survey (182kb)

Quarterly Enterprise Survey
No. 4
June 2003

• Managers do not expect any significant changes in the overall business climate for the next six months.

• Managers are very optimistic about growth in production output during the 2nd quarter.

• Managers continue to view the quality of the regulatory environment as very low.

• Loans are again becoming less accessible and affordable.

• Low demand, tax pressure, and regulations remain the main impediments to production growth.

• The financial situation of the firms is expected to improve

• The indices for sales/purchasing price expectations have decreased in the 2nd quarter 2003.

Quarterly Enterprise Survey (158kb)

Quarterly Enterprise Survey. Special issue.
No. 1
April 2003

A special issue of the Quarterly Enterprise Survey is dedicated to evaluation of business climate in 1999-2002. Special focus is made on the followings:

- Comparative analysis of small and large firms

- Dynamics of explicit and implicit corruption in Ukraine

• More than three quarters of managers perceive property rights as insecure;

• 86% of managers perceive regulations as unclear;

• "Time tax" is more than 13% of working time;

• About 70% of firms pay bribes to get "things done";

• Unpredictability of bribe's size is high and increases over time;

• About 25% of the firms are unsure about corruption outcome;

• Implicit corruption increases over time;

• Firms continue to avoid about 25% of taxes;

Quarterly Enterprise Survey (190kb)

Quarterly Enterprise Survey
No. 3
February 2003

• Business climate expectations for the next 6 months have slightly improved.

• In the 1st quarter 2003, managers expect usual seasonal slowdown of business activity.

• Index of production expectation for the 1st quarter is close to zero.

• Positive production expectations of the previous quarter are not fulfilled again.

• Managers' perceptions of the regulatory environment quality remain low.

• Long-term credits are slowly becoming more accessible and affordable.

• Low demand, tax pressure, and regulations remain the main impediments to production growth.

• Indices of sales/purchasing price expectations have increased for the 1st quarter 2003.

Quarterly Enterprise Survey (165kb)

Quarterly Enterprise Survey
No. 2
November, 2002

• Business climate expectations for the next 6 months have deteriorated dramatically.

• Administrative corruption, complex and non-transparent regulations as well as instability of regulations are perceived as the weakest points of current business climate.

• Affordability of credits has increased, while willingness of banks to provide loan has lowered.

• Tax pressure, low demand and regulatory issues are the three main impediments to production growth.

• Positive production expectations for the 3rd quarter 2002 are not fulfilled.

• Index of new orders’ expectations for the 4th quarter drops down considerably signaling possible worsening business activities in industrial sector.

• Production plans of small business become pessimistic.

Quarterly Enterprise Survey (181kb)

Quarterly Enterprise Survey
No. 1
August, 2002

• Managers expect business climate to improve within the next 6 months.

• Managers of the small firms are less optimistic than those of large firms.

• Shortage of finance, tax pressure, and low demand still form the three main impediments to production.

• For the first time since 1998, the unfavorable regulatory climate ranks 4th in the list of impediments to production.

• Arrears of all kinds are expected to decrease further in the 3rd quarter of 2002.

• Although the importance of high interest rate as impediment to production has declined, managers still perceive loans as being unaffordable.

Quarterly Enterprise Survey (160kb)