Business expectations fell to a 12-month low; what is the cause?

The business expectations index fell by 1.3 points to 45.9 in December, which is in line with the figure for December 2023 (45.7). Trade enterprises assessed their business activity results with restraint due to the difficult security situation and electricity shortages: The sectoral index in December was 49.9 (51.4 in November, 46.9 in December 2023).

Industrial enterprises assessed their performance results with more restraint due to electricity shortages, staff shortages, and increased production costs: December’s index was 44.6 (November – 46.7; December 2023 – 46.9). Service companies also weakened their assessments of their economic prospects against significant power outages, a shortage of qualified personnel, and increased business spending: December’s index was 44.5 (44.8 in November, 44.0 in December 2023).

Construction companies gave the most pessimistic assessments of their economic results, given the seasonality of construction work and reduced demand: December’s index was 43.4 versus 43.6 in November (42.1 in December 2023).