Business Conditions Under Escalating Pressure
Based on the Business Trends and Expectations Survey — June 2026
Prepared using data from Ousol Foundation for Economic Development and Sustainable Development
Distress with No Immediate Horizon
Numbers need little interpretation when they speak this clearly: 86% of surveyed businesses reported financial losses over the past six months. This is not a sector-specific crisis; rather, it is a systemic shock affecting the broader business environment across the board.
This is the diagnosis emerging from the June 2026 survey issued by the Ousol Foundation for Economic Development and Sustainable Development.
The Big Picture: Numbers Reveal the True Scale of the Crisis
The picture painted by the survey is deeply concerning. While 77% of businesses remain operational, 14% have temporarily suspended operations, and 13% have shut down permanently.
Among those still operating, sentiment remains weak. 47% rate their current performance as below average or poor, while only 23% classify their performance as good or excellent.
The Business Conditions Index (BCI) summarizes this reality in a single figure: 34.8 out of 100, placing the economy firmly in contraction territory.
The current index stands at 31.2, while expectations for the next six months improve only marginally to 38.3—a slight improvement, but far from enough to escape the current pressure cycle.
The Triple Pressure: Revenue, Costs, and Demand
The data reveals three interconnected forces squeezing businesses simultaneously.
First — Revenue and Demand Collapse
Revenues declined for 73% of businesses over the past two months, while 72% reported weaker demand.
This dual decline indicates that the problem is not managerial inefficiency or weak business strategy; rather, it reflects structural weakness in the broader market.
Second — Margin Compression
Input costs increased for 78% of businesses, while 63% raised selling prices.
Yet price increases have proven ineffective when customers either withdraw from the market or reduce spending. The result is severe margin compression from both sides, leaving businesses trapped in a situation with no quick exit.
Third — Employment and Working Hours Pressure
55% of business owners reduced the number of paid employees, while 47% reduced working hours.
These are not voluntary strategic adjustments; they are defensive responses to liquidity pressure and declining revenues.
Regulatory Burdens: A Wall Surrounding Businesses
Amid these pressures, businesses face a wall of government-related burdens that make survival harder and recovery slower.
At the top of the list are:
- Rising import duties and tariffs
- New taxes and fees
- High licensing costs
- Customs delays
Together, these burdens form what the survey describes as a “regulatory wall”, limiting the ability of small and medium-sized enterprises to invest and rebuild inventories.
This challenge is compounded by weak access to banking finance. 36% of businesses completely avoid using the banking system due to existing constraints, while only 34% actively rely on it.
This means a significant share of the market operates outside formal financial channels, severely restricting growth and reinvestment capacity.
Outlook: Pessimism Deepens
The outlook for the next six months is even more concerning.
- 55% expect poor or below-average performance, up from 47% today
- 54% expect further workforce reductions
- 55% anticipate weaker demand
- 68% expect input costs to continue rising
Most concerning of all, pessimism is no longer cyclical—it is becoming structural.
When the majority of businesses expect not recovery but further deterioration, this reflects a serious loss of confidence in the market’s ability to self-correct.
Artificial Intelligence: A Bright Spot in the Darkness
Amid this difficult environment, one notable positive indicator stands out.
Despite harsh conditions, 39% of businesses are already using Artificial Intelligence, and 84% of AI users plan to expand or continue its adoption.
More importantly, AI is primarily being used to support workers—not replace them.
Its strongest applications are in:
- Strategy and business development (61%)
- Finance and accounting (58%)
- Sales and marketing (55%)
Notably, 16% of businesses that adopted AI reported employment growth—an important figure in an economy where most firms are cutting jobs.
This suggests that when AI is integrated effectively with human capital, it can become a growth engine rather than a downsizing tool.
However, 54% of businesses remain outside the AI ecosystem, with the primary barrier being a shortage of qualified talent.
This creates a major opportunity for employment in:
- Training
- Consulting
- Technical infrastructure
- Digital transformation services
What Does the Business Environment Actually Need?
The survey offers eight practical recommendations, which can be summarized into four major pillars.
- Urgent Regulatory Reform
Unify overlapping fees and levies, accelerate customs clearance procedures, and review licensing costs to better reflect actual economic conditions.
2. Immediate Liquidity Support
With 86% of businesses suffering financial losses, waiting is no longer an option.
Concessional credit programs, tax deferrals, and guaranteed SME loans have become necessities rather than policy luxuries.
3. Reduce Input Cost Pressures
Targeted tariff reviews on raw materials and intermediate goods would directly help restore profit margins and improve competitiveness.
4. Enable the Digital Economy
Removing barriers to electronic payments, improving access to banking services, and supporting digital literacy and AI adoption are critical investments in a more resilient business environment.
Conclusion: The Window for Transformation Is Open — But Not Forever
What this survey reveals is not merely a bleak snapshot of current business conditions—it is an early warning signal demanding serious and urgent policy action.
Temporary closures (14%) can easily become permanent closures (13% already have).
Accumulated pessimism can evolve into long-term erosion of productive economic capacity.
At the same time, positive signals do exist.
One-third of businesses are voluntarily adopting AI despite intense pressure, reflecting a resilient entrepreneurial spirit waiting for the right environment to thrive.
Transformation is possible—but only through clear, consistent policies that restore market confidence, reduce pressure on businesses, and create genuine pathways toward recovery and growth.
The window remains open, but it will not remain open forever.