Economic trends from a business point of view (December 2023) “Frozen, but alive…optimism’23” Main economic trends in December 2023 based on the results of the New Monthly Enterprises Survey, #NRES On January 15, 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (December 2023)” within the framework of the project “Support to the Public Initiative “For Fair and Transparent Customs”. During the event, the results of the 20-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in December 2023, were presented. The field stage of the 20-th wave lasted from December 13 to December 31, 2023. In November, 535 companies were surveyed. The enterprise managers compared the work results in December 2023 with November, assessed the indicators at the time of the survey (December 2023), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022). The security situation has deteriorated: % of respondents who chose “work in current conditions is dangerous” among impediments to production increased from 38% to 53% (!) and moved to the 1st place in the list of impediments. Key massages: Despite the deteriorating security situation and high uncertainty that impact the deterioration of long-term plans, businesses are showing resilience by concentrating on finding solutions for the present and the immediate future. Main result 1. “Frozen” recovery BARI (Business Activity Recovery Index) remains high, but no changes comparing to the previous month. The share of enterprises operating at total capacity remained without significant changes (12% vs 13% in November). Industrial Confidence Indicator is without significant changes. Main result 2. Uncertainty is almost unchanged Uncertainty in the 6-month perspective remained without significant changes both for business activity at the enterprise and overall economic environment. Uncertainty in the 3-month also remained without significant changes after a sharp decrease in November. Uncertainty in the 2-year perspective remained high and without changed. Main result 3. Do long long- and medium expectations tend to go down? In December, for the first time in recent months, the business expectations for the next two years have deteriorated, but the “optimists” still exceed the “pessimists”. 6-month expectations regarding enterprises’ business activity and the overall economic environment have no change compared to November, but the annual trend decreased. Main result 4. Main result 4: Past performance and expectations Production performance in December vs November improved. 3 months perspective production expectations are positive but do not grow.

1. Oksana Kuziakiv, Executive Director at the IER
Yevhen Anhel, Senior Research Fellow at the IER
Iryna Fedets, Senior Research Fellow at the IER
Anastasia Gulik, Research Fellow at the IER
Kyiv, January 12, 2024
“Frozen, but alive…
optimism’23”
Main economic trends in December 2023
based on the results of the New Monthly Enterprises Survey,
#NRES

2. ABOUT THE NEW RAPID ENTERPRISES SURVEY
Monthly survey
SAMPLE: 535
enterprises
were surveyed
in December
Enterprises of
all sizes
Geography: 21
out of 27 regions
of Ukraine
Sectors: Industry +
(Retail, Agro)
20 surveys have
already been
conducted (since
May 2022)
The recent data were
collected
on December 13 - 31, 2023
New Monthly Enterprises Survey, #20, (12/2023) 2

3. Important finding
The security situation has deteriorated:
% of respondents who chose “work in current
conditions is dangerous” among impediments to
production increased from 38% to 53% (!) and
moved to the 1st place in the list of impediments
New Monthly Enterprises Survey, #20, (12/2023) 3

4. “It is dangerous to work” reached the highest value
• In December 2023, the share of
enterprises that reported that it
was dangerous to work increased
from 38% to 53% and it is the
highest result for all period of
Survey
• In the list of obstacles, “it is
dangerous to work“ moved up
from the 2nd to the 1st place
New Monthly Enterprises Survey, #20, (12/2023) 4
34%
30%
27%
26%
18%
33%
46% 47%
39% 40%
31%
25%
32% 31%
33% 33%
40%
32%
38%
53%
0%
10%
20%
30%
40%
50%
60%
May
22
Jun
22
Jul
22
Aug
22
Sep
22
Oct
22
Nov
22
Dec
22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
"It is dangerous to work", % of respondents

5. “It is dangerous” in regional
dimensions
New Monthly Enterprises Survey, #20, (12/2023) 5

6. Key messages
Despite the deteriorating security situation and high
uncertainty that impact the deterioration of long-
term plans, businesses are showing resilience by
concentrating on finding solutions for the present
and the immediate future
New Monthly Enterprises Survey, #20, (12/2023) 6

7. Main result 1. “Frozen” recovery
BARI (Business Activity Recovery
Index) remains high, but no
changes comparing to the
previous month
The share of enterprises operating
at total capacity remained
without significant changes(12%
vs 13% in November)
Industrial Confidence Indicator is
without significant changes
New Monthly Enterprises Survey, #20, (12/2023) 7

8. Business Activity Recovery Index
(BARI)* is high but not for all
New Monthly Enterprises Survey, #20, (12/2023) 8
In December compared to November 2023, the
Business Activity Recovery Index (BARI) is high but
has no changes (keeps+ 0.50 at the scale from -1 till
+1)
This happened due no changes in the % of positive
and negative answers:
• The share of enterprises reported that their
business activity is better than it was the
previous year is 63.6% (62.9% in November)
• The share of those for whom nothing has
changed constitutes 23.2% vs 24.6% in the
previous month
• Their share of those for whom the situation is
worse also has no significant changes (13.2% in vs
12.6% in November)
BUT there are significant differences between size
groups.
In November, the value of the BARI increased for
large and small enterprises but decreased
significantly for micro
-1,00
-0,80
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Business Activity Recovery Index
(balance between better/worse
assessments comparing to the
previous year)
-1,00
-0,80
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
0,80
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Business Activity Revovery Index
(by size)
Micro Small Medium Large
*BARI is based on question when managers make a comparison of “how it is now” vs. “how
it was a year ago

9. “Now” vs. “before February 24, 2022”:
keeping frozen recovery
The results of December are close
to November and previous
months:
• In December, as in November,
almost 2/3 of surveyed
enterprises have 75+% of
capacity utilization (compared to
before Feb 2022)
• The share of enterprises working
at 100% capacity is 12% (13% in
November)
• % of enterprises that do not
operate at all does not exceed
2% five months in a row
New Monthly Enterprises Survey, #20, (12/2023) 9
10 8
4 3 2 2 2 3 3 4 4 3 2 3 3 2 2 2 1 2
17
14
12
7 6 6 7 5 5 4 4
2 2 1 1 2 2 1 2 2
16
17
16
14
13 16
18
16 16 18
14
14
11 10 12 11 12 12 10 11
26
19
23
33
30
33 27
30 29 25
26
24
27
24
24 28 29
25 28 26
17
30 36
36
41
36 43 44 43
44 47
50 49
53 52
50 48
49 45 47
15 12 10 8 8 8
4 6 5 8 8 9 7 7 8 10 13 12
0
10
20
30
40
50
60
70
80
90
100
May.22 Jun.22 Jul.22 Aug.22 Sep.22 Oct.22 Nov.22 Dec.22 Jan.23 Feb.23 Mar.23 Apr.23 May.23 Jun.23 Jul.23 Aug.23 Sep.23 Oct.23 Nov.23 Dec.23
% of capacity utilization compared to "before February 24, 2022", % of respondents
0% capacity utilzation up to 25% 25%-49% 50%-74% 75%-99% 100% capacity utilization

10. Industrial Confidence Indicator (ICI)*
For three months in a row, the ICI remained
without significant changes
In December compared to November 2023, the
fluctuations of the components of ICI are the
following:
• The production expectation (PI) is 0.35 (0.36
in the previous month)
• Component stocks of finished goods (SFG)
lowered (from -0.12 in November to -0.14 in
December)
• Component volume of new orders (VNO)
also lowered (from -0.15 in November to -
0.20 in December)
*ICI= PI+VNO+(-SFG)/3
New Monthly Enterprises Survey, #20, (12/2023) 10
-0,50
-0,40
-0,30
-0,20
-0,10
0,00
0,10
0,20
0,30
0,40
0,50
M
A
Y
.
2
2
J
U
N
.
2
2
J
U
L
.
2
2
A
U
G
.
2
2
S
E
P
.
2
2
O
C
T
.
2
2
N
O
V
.
2
2
D
E
C
.
2
2
J
A
N
.
2
3
F
E
B
.
2
3
M
A
R
.
2
3
A
P
R
.
2
3
M
A
Y
.
2
3
J
U
N
.
2
3
J
U
L
.
2
3
A
U
G
.
2
3
S
E
P
.
2
3
O
C
T
.
2
3
N
O
V
.
2
3
D
E
C
.
2
3
INDUSTRIAL CONFIDENCE INDICATOR

11. Main result 2. Uncertainty is almost unchanged
Uncertainty in the 6-month
perspective remained without
significant changes both for business
activity at the enterprise and overall
economic environment
Uncertainty in the 3-month also
remained without significant changes
after a sharp decrease in November
Uncertainty in the 2-year perspective
remained high and without changed
New Monthly Enterprises Survey, #20, (12/2023) 11

12. Uncertainty for 6-month and 3-month perspective without
significant changes
Half-year horizon Three-month horizon
New Monthly Enterprises Survey, #20, (12/2023) 12
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
% that no answer the questions about 6 months changes on...
No answer on business activity at the enterprise in six month
No answer on economic environment in six month
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
Export Production Sales Number of
workers
New orders
% that no answer about 3 months changes on...
May.22 Jun.22 Jul.22 Aug.22 Sep.22 Oct.22 Nov.22
Dec.22 Jan.23 Feb.23 Mar.23 Apr.23 May.23 Jun.23
Jul.23 Aug.23 Sep.23 Oct.23 Nov.23 Dec.23

13. Long-term uncertainty doesn’t change
Uncertainty in the two-year perspective
New Monthly Enterprises Survey, #20, (12/2023) 13
“It is hard to predict what will be with the activities of our
enterprise in 2 years“, % of answers
% of enterprises that have no idea about their plans for 2 years is
52% as it was in previous month
42,3
54,2
51,9
56 57,4 56 57,7 56,5
60,8
55,0
56,4
56,0
56,7
51,9 51,8
0
10
20
30
40
50
60
70
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23

14. Main result 3. Do long- and medium expectations tend to go
down?
In December, for the first time in
recent months, the business
expectations for the next two years
have deteriorated, but the “optimists”
still exceed the “pessimists”
6-month expectations regarding
enterprises’ business activity and the
overall economic environment have
no change compared to November,
but the annual trend decreased.
New Monthly Enterprises Survey, #20, (12/2023) 14

15. Long-term expectation has deteriorated
Expectations in the two-year perspective
Index of expected changes in business activity
New Monthly Enterprises Survey, #20, (12/2023) 15
• The index of expected changes in 2 years perspective is
positive, but it has decreased from 0,17 to 0,10 in December
• Scale from -1 (bad) till +1 (good)
• % of enterprises that plan to grow in 2 years has decreased
from 24,2% in November till 19,1% in December
• % of enterprises planning to lower business activity
increased from 7% to 9%
37,5
31,6 30,4 31,6 29,8 28,2 29,7
24,4 23,1 25,9 23,1 25,1 25,3 24,2
19,1
56,3
56,7 60,4 60,8 64,6 66,1 63,4 71,4 74,0 68,2 69,2 69,0 68,8 69,1
71,8
6,3
11,6 9,3 7,5 5,6 5,7 6,9 4,1 2,9 6,0 7,7 5,9 5,9 6,7 9,1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Yes, I'm planning to extend Planning to stay at the current level Planning to lower activity
0,31
0,20
0,21
0,24 0,24
0,23 0,23
0,20 0,20 0,20
0,15
0,19 0,19
0,17
0,10
Expected business activity (2 years), index

16. 6-months perspective: tendency to worsening of
optimism slowed down
New Monthly Enterprises Survey, #20, (12/2023) 16
Business activity at the enterprise Overall economic environment in the country
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Jan.24
Business activity at the enterprise Expected business activity at the enterprise
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Jan.24
Current overall economic environment Expected overall economic environment

17. Main result 4: Past performance and expectations
Production performance in
December vs November improved
3 months perspective production
expectations are positive but do not
grow
Employment indicators keep
trending on a seasonal deceleration
while the labor market experienced
a shortage of unskilled workers.
Export results improved,
expectations remained without
significant changes
New Monthly Enterprises Survey, #20, (12/2023) 17

18. Optimism on production plans with no change
three months in a row
Expectations for 3 months
• % of enterprises planning a production growth in the
next 3-4 months slightly decreased from 40.2% in
November to 38.5% in December.
• % of enterprises that expected a decrease in
production also decreased from 6,4% in November
to 5.3% in December.
• Index of expected production remained unchanged
(0,36 and 0,35, respectively).
New Monthly Enterprises Survey, #20, (12/2023) 18
Production, balance indicators
-0,80
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
0,80
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Jan.24
Production Production exp.
Past performance (December vs. November)
• % of enterprises increased in production raised
from 29,6% in November to 34.4% in December
• % of enterprises decreased in production has
dropped from 6,4 to 5.3%
• Index of change has increased from 0,17 to 0,21

19. Export: improved performance,
but deteriorated expectation
Past performance (December vs November)
• % of enterprises reporting growth of export
increased from 24.2% in November to 31.1% in
December
• % of enterprises informing reducing export has not
changed (20.1%in December, 19.0% in November)
• Index of changes has increased from 0,09 to 0,13
New Monthly Enterprises Survey, #20, (12/2023) 19
Export, balance indicators
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep,23
Oct.23
Nov.23
Dec.23
Jan.24
Export Export exp.
Expectations for 3 months:
• % of enterprises expecting growth of export
decreased from 35,0% in November to 31.2% in
December
• % of enterprises planning to reduce export has not
changed (6,5 % in December, 6,8% in November)
• The index of expected export has decreased from
0,30 in November to 0,27 in December

20. Employment: business continue to decrease number of workers
Number of workers Number of workers on forced leave
New Monthly Enterprises Survey, #20, (12/2023) 20
• % of enterprises planning employment growth in the next 3-4 month
increased from 2.8% to 5.1%
• % of enterprises intending to reduce the number of employees remained
without significant changes (6.7% in December vs 6.0% in November)
• % of enterprises at which no changes in employment are expected
decreased from 91% to 88.3%
• % of enterprises that will increase the number of employees on forced
leave slightly decrease (0.5% vs 1.7% in November)
• % of enterprises that are going to reduce employees on forced leave
increased from 25.5% to 27.0%
• % unchanged is 72.5% (72.9% in November)
-0,60
-0,50
-0,40
-0,30
-0,20
-0,10
0,00
0,10
0,20
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov,22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Jan.24
Number of workers Number of workers exp.
-0,40
-0,30
-0,20
-0,10
0,00
0,10
0,20
0,30
0,40
May.22
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.23
Jan.24
Workers on forced leave Workers on forced leave exp.

21. Problems with finding workers increased
Problems with finding workers
In December business reported on with finding both
skilled and unskilled workers
Skilled workers:
• % of those who reported that it is more difficult to
find such workers increased (from 26.3% in
November to 29.1% in December).
• % of those to whom it is easier to search for skilled
workers almost unchanged (1.8% in December vs
0.8% in November)
Unskilled workers:
• % of those who report that it is easy to find them
is without significant changes (4.7% in November
and 5.2% in December)
• % of those to whom this is harder increased (from
22.6% in November to 25.0% in December)
New Monthly Enterprises Survey, #20, (12/2023) 21
0,24
0,18
0,06
0,09
0,17
0,11
0,12
0,19
0,26
0,14
0,25
0,21
0,23
0,27
0,23
0,24 0,24 0,24
0,29
-0,01
-0,06
-0,07-0,07
0,09
0,02
0,05
0,06
0,14
0,06
0,11 0,11
0,17
0,16
0,14
0,12
0,13
0,18
0,22
-0,10
-0,05
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
Jun.22
Jul.22
Aug.22
Sep.22
Oct.22
Nov.22
Dec.22
Jan.23
Feb.23
Mar.23
Apr.23
May.23
Jun.23
Jul.23
Aug.23
Sep.23
Oct.23
Nov.23
Dec.24
Skilled workers Unskilled workers

22. Main results 5: Impediments, economic policy
In December, the list of impediments
significantly changed; security issues and
“lack of personnel” took the 1st and 2nd
places, shifting “rise in price” on the 3rd
place
% of respondents who identified "working
in current conditions is dangerous" as an
impediment to production has risen
significantly, from 38% to 50%, and it now
maintains its position as the top-ranked
impediment.
Negative assessments of the
government’s economic policy have
decreased, while neutral assessments
have increased.
New Monthly Enterprises Survey, #20, (12/2023) 22

23. The main impediments to doing business in wartime, % respondents
There are several significant changes in the list of
impediments in December compared to November
2023
• The “it is dangerous to work” impediment
increased its value from 38% to 53% and moved
up from the 2nd place to the 1st
• “Lack of personnel” moved from 4th place to 2nd
place after increasing its value from 35% to 46%
• Disruption of supply changes moved to 3rd place.
• The impediment “rising prices for raw materials
and goods” despite a slight increase of value
moved to the 3rd place in the list after leading the
ranking several months in a row
• “Decrease in demand” remained at the 5th place,
although its value decrease a bit
• “Electricity interruptions”, after increasing its
value from 28% to 30%, shares 5th place with
decrease in demand.
• Corruption and pressure from law enforcement
agencies are not significant problems
New Monthly Enterprises Survey, #20, (12/2023) 23

24. 2/3 of surveyed enterprises have neither positive nor negative
assessment towards the Government’s economic policy
New Monthly Enterprises Survey, #20, (12/2023) 24
• The share of positive assessments of the government’s policy on business is 8% and it remained
without significant changes for the fifth month in a row
• The share of neutral assessments of the government’s policy on business support increased from 55%
in November to 58% in December
• The share of negative assessments decreased from 19% to 16%

25. Today State Ukraine (Government) for business is:
New Monthly Enterprises Survey, #20, (12/2023) 25
2%
31%
33%
7%
1%
25%
ENEMY OBSTACLE REGULATOR PARTNER FRIEND DK/HARD TO SAY
For business, the state (government) Ukraine today is...
Dec.23

26. New monthly enterprise survey. Methodology
The need for comprehensive information on the economic situation is crucial for economic policy in wartime. The Institute for Economic Research and
Policy Consulting conducts a monthly enterprise survey using the Business Tendency Survey approach to quickly collect information on the current
economic state at the enterprise level. The methodology is designed to assess the situation from the “base level”: the judgments and expectations of key
economic agents such as entrepreneurs and business managers.
The monthly survey consists of two parts: the regular one and the special one. Respondents will regularly answer questions on the changes in key activity
indicators and short-term forecasts for future changes in the same indicators: output (production), sales, exports, debt, new orders, employment, etc. We
will also focus on estimates and expectations of the changes in the business climate and business activity at the enterprise in the next six months.
The special part of the Monthly survey provides information on specific topics. A special part examines the enterprises' problems, the war's impact on
production volumes, export activity, basic business needs, and the assessment of government policy.
This survey uses a panel sample that includes 500+ enterprises located in 21 of 27 regions of Ukraine, including Vinnytsya, Volyn, Dnipropetrovsk,
Zhytomyr, Zakarpattya, Zaporizhzhia, Ivano-Frankivsk, Kyiv, Kirovohrad, Lviv, Odesa, Poltava, Rivne, Sumy, Ternopil, Kharkiv, Khmelnytskyy, Cherkasy,
Chernivtsi and Chernihiv regions and the Kyiv city.
The field stage of the 20-th wave lasted from December 13 to December 31, 2023. The enterprise managers compared the work results in December 2023
with November, assessed the indicators at the time of the survey (December 2023), and gave forecasts for the next two, three, or six months, depending
on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
New Monthly Enterprises Survey, #20, (12/2023) 26

27. Our contacts
27
website: www.ier.com.ua
e-mail: rubanik@ier.kyiv.ua
kuziakiv@ier.kyiv.ua
Facebook: https://www.facebook.com/IER.Kyiv/
Twitter (in English only): https://twitter.com/IER_Kyiv