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  • Ukrainian business plans to increase production in the future Monthly Enterprises Survey

    14.10.2022

    Ukrainian business has significantly improved expectations and plans to increase production in the future.

    These are the results of our fifth new Monthly Survey of Enterprises for September 2022, which IER experts presented during the online event "Economic trends from a business point of view." 

    For instance, as the survey showed, the business environment and economic conditions continue to be characterized by a high level of uncertainty. Although it has become easier for entrepreneurs to forecast their activities for the next three months, uncertainty has increased in the long term.

    Enterprises' production expectations improved significantly. The share of enterprises planning to increase production grew, while the percentage of those planning to decrease production remained almost unchanged.

    Also, enterprises continued to restore production volumes to pre-war levels in September. The share of enterprises operating almost at the same production capacities as before February 24, 2022, has increased. The demand situation has also improved. In particular, the sales and new order rates decreased.

    At the same time, the business shows caution in the forecasts regarding the increase in the number of employees. In the future, enterprise managers do not expect employment growth, but they rarely predict a decrease in the number of employees.

    "The decline in employment rate has significantly decreased. Businesses don't want layoffs, but they can't hire new staff. The business does not feel either a lack of skilled workers or such a great need for them," explained Oksana Kuziakiv, executive director at IER. 

    The biggest obstacles in September were rising prices for raw materials and supplies, difficulties transporting raw materials or goods throughout Ukraine, and a lack of working capital traditionally cited by the business.

    "Importantly, the percentage of respondents who chose lack of fuel and security as obstacles was the lowest in all five surveys we conducted. It means that the business adapts to the conditions of the environment and feels safer," the IER expert said.

    Also, the survey results showed that export activity continues to recover, and optimism about the future among exporters is growing.

    "We are observing the positive dynamics of export activity recovery. The share of enterprises that stopped exporting during the war and were unable to resume it continues to decrease," Yevhen Angel, a senior researcher at the IER, noted.

    The main obstacles for exporters in September were queues at the western borders of Ukraine, the impossibility of exporting by sea, and complex customs formalities.

    "Obstacles related to logistical issues were activated. Business feels the problems with customs work several times more strongly. This is also evidenced by the actualization of corruption at customs," added the IER expert.

    In September, micro-enterprises resumed their work the slowest compared to small and large ones. At the same time, such enterprises significantly improved expectations regarding changes in the financial and economic situation.

    "In August, the expectations of micro-enterprises were somewhat pessimistic. In September, the situation changed: for micro-enterprises, the value of expecting positive changes in the financial and economic situation for the future increased and became greater than the average and the value for enterprises of other sizes," emphasized Iryna Fedets, a senior researcher at the IER.

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