After two consecutive months of positive sentiment, in May Ukrainian businesses worsened their performance estimates.

According to the National Bank, the index of expectations for business activity fell to 48 from 52.3 points in April. The mood of Ukrainian enterprises was affected by the increased intensity of hostilities and shelling of infrastructure facilities, electricity shortages, an increase in production costs due to high fuel prices and rising logistics costs, weak investment demand, worsening course expectations, a significant shortage of qualified personnel, and uncertainty regarding the further course of hostilities and conditions of mobilization.

The sectoral index of industrial enterprises decreased to 48.8 points (in April – 51.7), trade enterprises to 47.7 (51.8), and construction enterprises to 49.8 (53.4). Enterprises in the service sector assessed the results of their activities cautiously and worsened expectations of their economic prospects: the index fell to 47.2 (53.1).

“The situation in the labor market remains difficult. Only construction respondents expected a slight increase in the number of employees. Managers in other sectors worsened their assessments and expected further reductions in personnel, the most in the service sector,” the NBU added.