Report

1. 1
BUSINESS COUNCIL OF MONGOLIA
BUSINESS GROWTH INDEX Q4-2015
REPORT
Background
The Business Council of Mongolia (BCM) is a membership based non-government organization
founded in the fall of 2007 to promote increased trade and investment in Mongolia. BCM represents
all investors in Mongolia, domestic and foreign, on business climate issues. It is a premier business
association in Mongolia dedicated to meeting the critical needs of its members, namely, to get more
business such as profits, clients; to obtain information critical to their businesses; and to have a
legal and regulatory environment conducive to their businesses. Starting June, 2015 BCM is
releasing the BCM Business Growth Index (BGI), a regular Centigrade thermometer of business
climate in Mongolia, which tracks quarterly movements in business confidence.
This report relates to the BGI Quarter Four of 2015 (BGI Q4-2015). BCM publicizes the results of
quarterly BGI through the BCM website, social media pages, weekly BCM NewsWire and will
continuously use it as one of the tools of communication in the BCM efforts of advocacy and
dialogue with the relevant authorities in Mongolia. Over the years the collected data can serve as a
valuable resource for making comparative analyses of the overall business climate and growth in
Mongolia.
Methodology
BCM’s BGI was developed based on the results of a questionnaire collected from a BCM member
organizations including both national and international entities operating in Mongolia in trade,
service and manufacturing on small, medium and large scales. The survey questionnaire was
professionally designed in consultation with Sumati Luvsandendev, Founder and Director of Sant
Maral Foundation, an institution well-known for its opinion polls, market and research work. The
BGI questionnaire is composed of a set of key 7 indicators related to company internal aspects as
well as overall business environment. Occasionally, the questionnaire shall have specific questions
in addition to the regular indicators.
The main results of this index are shown in the form of temperature growth or fall of business
environment in Mongolia. In other words, negative developments will send business to minus
temperatures, whereas positive developments will produce warm temperatures accordingly. The

2. 2
best temperature for business in Mongolia in the BCM Business Growth Index is assumed as +500
C
(or 1220
F) which is equivalent to 100 points on a scale of 100. The worst temperature is assumed as
-500
C (or -580
F) which is equivalent to 0 on a scale of 100.
Sampling and demographic information
Survey questionnaire responses for this quarter were collected via online link, during BCM monthly
meeting and by telephone. One response per member organization was collected. The total sample
size of BCM BGI Q4-2015 is 80. All respondents are BCM member organizations. The current
sample size represents almost 50% of total number of corporate members that excludes embassies,
IFIs, NGOs and associations.
46% of respondent organizations have Mongolian ownership, 29% have foreign ownership and the
remaining 25% are mixed ownership companies. They operate mainly in the field of service (50%),
financial services and investment (12%) and trading (6%). Others represent manufacturing (4),
construction (3), mining (5) and other sectors.
In terms of size of operation, 46% are large with annual turnover of over 2 billion MNT; 39% are
medium with annual turnover of between 150m-2billion MNT and 15% are small companies with
annual turnover of less than 150m MNT respectively. The respondent organizations employ a total
of over 18,400 people.
Results of main indicators
The overall BCM Business Growth Index Temperature for Q4-2015 is -30
C. It is 3 degrees warmer
than the previous quarter temperature which was -60
C. The highest temperature is shown for the
“Expectation of your business investment plan for the next year” to be +60
C, which increased by
40
C from Q3. The lowest temperature is shown for the “Business situation in your enterprise
compared to last year” to be -150
C, which is exactly the same as in Q3.
The slight warming in overall temperature of business environment is due to more positive forward
looking answers in terms of investment plans for the next year. Moreover, respondents this quarter
are less critical about the macroeconomic outlook for Mongolia in 2016 as they were in previous
quarter. The assessment of legal environment for running a business in Mongolia by the
respondents was also slightly milder compared to the quarter three. Another factor of this slight
improvement in temperature is assumed to be related to a decreased percentage of small scale
enterprises and a continuing large proportion of large scale enterprises in this quarter.
Moreover, BCM BGI Q4-2015 results are similar in tendency with other reports. For instance
according to the monthly “The Sales Managers Index: Mongolia” dated February 19, 2016, the
Business Confidence Index in February, showed a weaker decline in the level of business optimism
compared to January data. (http://www.worldeconomics.com/SMI/Mongolia-
SalesManagersIndex.efp)

3. 3
The table below shows temperatures for all key indicators for this quarter compared to the last
quarter.
Table 1: Results of the key indicators compared to last quarter
N Key Indicators Q4-2015 Q3-2015
1 How will you evaluate current business situation in
your enterprise?
-120
C -130
C
2 How will you compare the situation in your Enterprise
to last year?
-150
C -150
C
3 How will you assess the outlook for your business for
the next year?
+40
C +60
C
4 What do you expect of your business investment plan
for the next year?
+60
C +20
C
5 How do you assess this Macroeconomic outlook for
Mongolia in one year’s time?
-30
C -50
C
6 How do you assess the legal environment for a business
operation in Mongolia?
-80
C -120
C
7 How do you estimate the volume of international
investment into Mongolia in one year’s time?
+30
C +30
C
Info graphic 1: BCM Business Growth Index Overall Temperature for Q4-2015

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Info graphic 2: BCM BGI Q4-2015 Key Indicators
Info graphic 3: BCM BGI Q4-2015 Key Indicators compared with Q3-2015)

5. 5

6. 6

7. 7

8. 8
ANNEX: BCM BGI Q4-2015 RESULTS (SPSS output data)
DESCRIPTIVE STATISTICS
N Minimum Maximum
Mean
(in Temperature) Std. Deviation
How will you evaluate
current business situation
in your enterprise? 80 -50 25 -11,88 21,412
How will you compare the
situation in your Enterprise
to last year? 78 -50 25 -14,74 21,104
How will you assess the
outlook for your business
for the next year? 78 -50 25 3,85 21,726
What do you expect of your
business investment plan
for the next year? 78 -50 50 6,09 23,211
How do you assess this
Macroeconomic outlook for
Mongolia in one year’s
time?
80 -50 25 -2,50 21,273
How do you assess the
legal environment for a
business operation in
Mongolia?
80 -50 25 -8,44 18,204
How do you estimate the
volume of international
investment into Mongolia in
one year’s time?
80 -50 50 3,13 23,659
Valid N (listwise) 75

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Summary Statistics for 7 Indicators
How will you
evaluate
current
business
situation in
your
enterprise?
How will
you
compare
the
situation in
your
Enterprise
to last
year?
How will you
assess the
outlook for
your
business for
the next
year?
What do
you expect
of your
business
investment
plan for the
next year?
How do you
assess this
Macroecon
omic
outlook for
Mongolia in
one year’s
time?
How do you
assess the
legal
environment
for a
business
operation in
Mongolia?
How do you
estimate the
volume of
international
investment
into
Mongolia in
one year’s
time?
N Valid 80 78 78 78 80 80 80
Missing 0 2 2 2 0 0 0
Mean 3,48 3,59 2,85 2,76 3,10 3,34 3,13
Percentiles 25 3,00 3,00 2,00 2,00 2,00 3,00 ,00
50 3,00 4,00 3,00 3,00 3,00 3,00 ,00
75 4,00 4,00 3,00 3,00 4,00 4,00 25,00
Indicator 1: How will you evaluate current business situation in your enterprise?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Good 10 12,5 12,5 12,5
Neutral 31 38,8 38,8 51,3
Bad 30 37,5 37,5 88,8
Very bad 9 11,3 11,3 100,0
Total 80 100,0 100,0
Indicator 2: How will you compare the situation in your Enterprise to last year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Improved 8 10,0 10,3 10,3
Same 26 32,5 33,3 43,6
Worsened 34 42,5 43,6 87,2
Worsened significantly 10 12,5 12,8 100,0
Total 78 97,5 100,0
Missing System 2 2,5
Total 80 100,0
Indicator 3: How will you assess the outlook for your business for the next year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Improve 32 40,0 41,0 41,0
Same 30 37,5 38,5 79,5
Worsen 12 15,0 15,4 94,9
Worsen significantly 4 5,0 5,1 100,0
Total 78 97,5 100,0
Missing System 2 2,5

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Total 80 100,0
Indicator 4: What do you expect of your business investment plan for the next year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Increase significantly 4 5,0 5,1 5,1
Increase 28 35,0 35,9 41,0
Same 34 42,5 43,6 84,6
Decrease 7 8,8 9,0 93,6
Decrease significantly 5 6,3 6,4 100,0
Total 78 97,5 100,0
Missing System 2 2,5
Total 80 100,0
Indicator 5: How do you assess this Macroeconomic outlook for Mongolia in one year’s time?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Improve 22 27,5 27,5 27,5
Same 31 38,8 38,8 66,3
Worsen 24 30,0 30,0 96,3
Worsen significantly 3 3,8 3,8 100,0
Total 80 100,0 100,0
Indicator 6: How do you assess the legal environment for a business operation in Mongolia?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Good 6 7,5 7,5 7,5
Neutral 47 58,8 58,8 66,3
Bad 21 26,3 26,3 92,5
Very bad 6 7,5 7,5 100,0
Total 80 100,0 100,0
Indicator 7: How do you estimate the volume of international investment into Mongolia in one year’s time?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Increase significantly 2 2,5 2,5 2,5
Increase 30 37,5 37,5 40,0
Stay the same 29 36,3 36,3 76,3
Decrease 14 17,5 17,5 93,8
Decrease significantly 5 6,3 6,3 100,0
Total 80 100,0 100,0

11. 11
Demographic information:
Sector/s your enterprise operates in
Frequency Percent Valid Percent
Cumulative
Percent
Valid Service 39 48,8 49,4 49,4
Trading 5 6,3 6,3 55,7
Manufacturing 3 3,8 3,8 59,5
Construction 2 2,5 2,5 62,0
Mining 4 5,0 5,1 67,1
Financial
Services/Investment 9 11,3 11,4 78,5
Other 17 21,3 21,5 100,0
Total 79 98,8 100,0
Missing System 1 1,3
Total 80 100,0
How many employees does your enterprise have?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 2 1 1,3 1,3 1,3
3 2 2,5 2,7 4,0
4 1 1,3 1,3 5,3
5 2 2,5 2,7 8,0
6 3 3,8 4,0 12,0
7 1 1,3 1,3 13,3
8 1 1,3 1,3 14,7
9 3 3,8 4,0 18,7
10 9 11,3 12,0 30,7
11 1 1,3 1,3 32,0
12 2 2,5 2,7 34,7
13 1 1,3 1,3 36,0
15 4 5,0 5,3 41,3
16 1 1,3 1,3 42,7
17 1 1,3 1,3 44,0
18 1 1,3 1,3 45,3
20 2 2,5 2,7 48,0
21 1 1,3 1,3 49,3
22 1 1,3 1,3 50,7
25 1 1,3 1,3 52,0
28 1 1,3 1,3 53,3
30 2 2,5 2,7 56,0
35 2 2,5 2,7 58,7
40 1 1,3 1,3 60,0
50 1 1,3 1,3 61,3
55 2 2,5 2,7 64,0
68 1 1,3 1,3 65,3
70 3 3,8 4,0 69,3

12. 12
80 2 2,5 2,7 72,0
84 1 1,3 1,3 73,3
85 1 1,3 1,3 74,7
90 2 2,5 2,7 77,3
100 4 5,0 5,3 82,7
110 1 1,3 1,3 84,0
140 1 1,3 1,3 85,3
150 1 1,3 1,3 86,7
250 1 1,3 1,3 88,0
285 1 1,3 1,3 89,3
400 1 1,3 1,3 90,7
500 1 1,3 1,3 92,0
1500 1 1,3 1,3 93,3
1600 2 2,5 2,7 96,0
2000 1 1,3 1,3 97,3
5000 1 1,3 1,3 98,7
5400 1 1,3 1,3 100,0
Total 75 93,8 100,0
Missing System 5 6,3
Total 80 100,0
What is the annual turnover of your enterprise?
Frequency Percent Valid Percent
Cumulative
Percent
Valid < 150 mln MNT 10 12,5 14,5 14,5
150 mln - 2000 mln MNT 27 33,8 39,1 53,6
> 2000 mln MNT 32 40,0 46,4 100,0
Total 69 86,3 100,0
Missing System 11 13,8
Total 80 100,0
What type of ownership does your company have?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Mongolian 37 46,3 46,3 46,3
Foreign 23 28,8 28,8 75,0
Mixed 20 25,0 25,0 100,0
Total 80 100,0 100,0
The Business Council of Mongolia
Ulaanbaatar February 22, 2016