Business confidence increased in Q3’17, according to a survey among top managers published by the NBU today. The balance of output expectations for the next 12 months improved further to 17.5% from 14.2% in Q2 and from 6.1% in Q1. Output growth is expected across the economy, while the most optimistic are utility and trade companies, and on the regional scale the most optimistic firms are located in the western province of Lvov (Lviv), according to the survey. Having a long border with Poland, it likely benefits more than most other provinces from the free trade agreement with the EU which recently came into effect.
The business expectations index grew to 117.4% in Q3’17 from 114.3% in Q2 and 113.3% in Q1. Optimism prevails across the economy, except the construction industry, according to the survey. Manufacturing industry managers are the most optimistic (127.1%), followed by transport and communications (122.9%), and trade (120.2%). Respondents were more upbeat about their current financial and economic situation (balance 7.2%, up from 6.1% in Q2 and 2.3% in both Q1’17 and Q4’16). There was also more optimism about the national currency stability, investment, and employment. At the same time, inflation and credit growth expectations were more conservative than in the previous quarter. This is not surprising, given that inflation has been growing, and credit has been shrinking so far this year.