Over 60% of Ukrainian businesses see their performance significantly affected by war – survey results

The relevant statement was made by Alla Ivashchenko, Doctor of Economics, Associate Professor at Kyiv National Economic University named after Vadym Hetman, during the presentation ‘Resilience of Ukrainian Businesses amid Full-Scale Invasion’, which was held in Ukrinform.

According to Ivashchenko, frontline regions are facing the most challenging situation, especially in the segment of micro and small businesses. Enterprises are continuously affected by the damage caused to infrastructure, disrupted supply chains, staff attrition, and the lack of material and financial resources.

“During the survey, over 60% of small and medium-sized businesses noted a decline in production indicators, sales, and customer numbers. At the same time, over 33% of respondents in the frontline regions and almost 30% in other regions of Ukraine reported significant losses. It is worth noting that almost 20% of surveyed businesses are on the verge of closure. The worst situation is in the segment of  micro and small businesses,” Ivashchenko emphasized.

The researcher pointed out that about 72% of businesses experienced a rise in the production cost of goods and services. In 73% of cases, this led to a decrease in profitability. About 61% of businesses are not investing in development at all, which indicates the absence of long-term planning due to the lack of funds and the aforementioned reduced profitability.

Among the main factors that affected businesses with the start of the Russian full-scale invasion, the researcher noted mobilization processes, the lack of competent personnel, as well as problems with product sales and significant energy costs.

“Military actions are also reducing the investment attractiveness of the regions, which, among other things, complicates the recovery and development of businesses, as well as adds risks and uncertainty regarding the future,” Ivashchenko concluded.

The survey was conducted as part of the research project ‘Relocated Businesses in the Context of the Revitalization of Regional Ecosystems" of Kyiv National Economic University named after Vadym Hetman. The poll was taken between June 12, 2024 and August 9, 2024. The sample includes 631 enterprises, which are representative of more than 1.7 million active enterprises in Ukraine.