Ukrainian business loses optimism in the medium term - survey.

Ukrainian enterprises have faced power supply problems, which led to a deterioration in their expectations for the first six months of 2024. During July, the pace of recovery significantly slowed down, according to the monthly survey of the Institute for Economic Research and Policy Consulting (IER).

"The situation with power supply disruptions has negatively affected our financial and economic expectations: in June this indicator was 0.55, and in July it decreased to 0.22," said Oksana Kuzjakiv, Executive Director of IER.

This is the lowest level of expectations since the beginning of January 2023.

Also, the number of enterprises operating at full capacity has almost halved, indicating a delay in recovery in the near period. At the same Time, the proportion of companies that are not working at all remains practically unchanged.

In July, the proportion of enterprises with full capacity decreased from 20% to 11%, with 75-99% - from 37% to 34%. At the same time, the proportion of enterprises with a capacity of 50-74% increased from 25% to 33%, with 25-49% - from 14% to 16%. Also, the number of enterprises with less than 25% capacity increased from 2% to 4%, and the number of idle enterprises increased from 2% to 3%.

According to the survey, the business activity recovery index decreased from 0.37 to 0.13. The proportion of enterprises reporting an increase in activity decreased to 28.2%, and those reporting a decline in activity increased to 15.3%. At the same time, micro-enterprises show the worst results.

Problems with power supply are the main obstacle for business, said 78% of respondents in the July survey. This number corresponds to the level in November 2022, when Ukraine was experiencing difficulties with power supply due to Russian attacks.

At the same time, other problems are also growing, such as work safety (the percentage increased from 54% to 58%) and labor shortage (the percentage increased from 42% to 47%).

"Labor shortage, caused by conscription and the departure of workers, has again become the main obstacle for enterprises. Also, the price of raw materials and materials is rising. Previously, labor market issues were less relevant, but now almost every other business talks about a labor shortage," said Yevhen Angel, IER expert.

According to the survey, problems with finding workers increased from 34.6% to 50.8%, the number of vacancies for unskilled workers is also growing.

In July, the number of enterprises expecting price increases over the next three months increased. However, this factor dropped to 4th place in the ranking of problems, which it shares with the decrease in demand for products and services.

However, even with such problems, long-term plans have improved: the number of enterprises planning to expand their activities has increased.

In the survey, conducted monthly by IER, a total of 483 industrial enterprises from 21 regions of Ukraine participated.

Source: Interfax-Ukraine