- In September, the Business Recovery Index declined after August growth
- Recovery is slowing down, and long-term uncertainty continues to rise
- The average duration of new order portfolios decreased from 4.5 to 4.3 months
- Main business obstacles: labor shortage (60%), rising prices (55%), and security risks (51%)
- The share of positive assessments of the government’s economic policy dropped to 4%
Despite the stable operation of most Ukrainian enterprises, business confidence in the future weakened, and expectations for the coming months became more cautious. These are the results of the 41st monthly survey conducted by the Institute for Economic Research and Policy Consulting (IER) between September 16 and 30 among 475 industrial enterprises.
“In September, the results were collectively the most pessimistic and raise serious concern,” said Oksana Kuziakiv, Executive Director of the IER. “Business confidence in the future has weakened, recovery has slowed, and long-term uncertainty continues to grow amid persistent pressure from labor shortages, physical security risks caused by the war, and rising prices.”
The Business Recovery Index (BRI) decreased after August growth — from 0.08 to 0.05. Although the change is minor, since March 2025 there has been a steady downward trend in recovery momentum. Microbusinesses (–0.3) — traditionally showing the lowest BRI — are gradually improving, while large enterprises show the highest value (0.3).
“Small and medium-sized enterprises form the foundation of Ukraine’s economy, and it is in this segment that we see two clear signs of a slowdown in recovery. This is the biggest concern,” said Oksana Kuziakiv.
Currently, 65% of enterprises are operating at 75% or more of their capacity (up from 63% in August). The share of those that have completely ceased operations grew slightly from 2% to 4%, but remains low.
The aggregate industry outlook indicator, which measures short-term business plans and changes, dropped by 2 p.p. to 0.12, reflecting a deterioration in short-term production expectations. The index of expected production changes fell from 0.49 to 0.42, and exports — from 0.48 to 0.42.
Medium-term uncertainty decreased: the uncertainty about the overall economic environment fell from 23.6% to 17.3%, and about the enterprise’s financial and economic situation — from 21.9% to 16.2%. Short-term uncertainty (three-month horizon) remained almost unchanged. However, long-term uncertainty has been growing for the second consecutive month — up to 38.7% in September from 36.5% in August. This means that nearly two out of five companies cannot predict their situation two years ahead.
The share of entrepreneurs who do not expect significant production changes over the next two years increased from 77.8% to 85.5%. This was driven by a decrease in the share of those planning to expand production (from 17.5% to 11.2%) and those expecting contraction (from 4.7% to 3.2%).
“It’s positive that most enterprises able to predict their activities for the next two years do not expect negative changes,” said Yevhen Angel, Senior Research Fellow at the IER.
Production performance worsened. The share of those who have already increased output declined from 28.5% to 24.4%, as did the share planning to boost production within three months — from 46.8% to 42.2%. A similar situation was observed in exports, with both indicators down by 1.9 p.p. and 4 p.p., respectively.
“Sales and new order expectations worsened in September after a surge in August. The average new order portfolio stood at 4.3 months compared to 4.5 months in July and August. The share of enterprises with an order horizon of one year or more fell from 10% to 7%,” said Yevhen Angel. “The best situation is in the wood processing industry (5.3 months), and the worst — among construction materials producers (2.6 months).”
In September, 47.9% of enterprises expected further increases in raw material prices (up from 40.6% in August), and 45.6% expected higher prices for finished goods (up from 40%). This means inflationary pressure is not only persisting but also intensifying.
Labor shortages remain the most acute issue. 53% of enterprises reported growing difficulties finding qualified workers (up from 50% in August), and 40% — unqualified ones. Only 15.5% of companies plan to increase employment in the next 3–4 months, while the labor market continues to face staff shortages.
“In September, problems finding both skilled and unskilled workers intensified. The share of enterprises struggling to find qualified personnel rose from 50.1% to 52.8%, and unqualified — from 36.3% to 39.6%. Since summer 2024, the gap between the two categories has widened — finding skilled workers is much harder,” said Yevhen Angel.
In September, the top three business obstacles remained unchanged:
- labor shortage — 60% (–2 p.p.),
- rising prices — 55% (+3 p.p.),
- security risks (“dangerous to work”) — 51% (–1 p.p.).
25% of respondents reported reduced demand for goods and services, 18% — transportation difficulties, and 17% — supply chain disruptions. Lack of working capital was cited by 14%, while corruption and other issues were mentioned by fewer than 10%.
“The ‘dangerous to work’ obstacle has remained above 50% for over a year. Large enterprises are more concerned about safety (65%), while micro and small ones — 45–46%. This is logical, since large and medium enterprises often operate industrial facilities that can be targets for missile or drone attacks,” said Yevhen Angel.
Interruptions in electricity, water, or heating are no longer among the top ten obstacles (4%). “For seven months, this indicator has remained low. However, it is likely to rise in October given the first long power outages, including in Kyiv,” predicted Yevhen Angel.
The share of neutral assessments of government economic policy rose again in September — to 63%. The share of positive assessments halved — to 4%.
“The share of negative assessments has consistently exceeded 20% for many months (21% in September). Unfortunately, since June 2023, businesses have tended to rate the government’s economic policy more negatively than positively,” said Yevhen Angel.
Business perception of the state remained relatively stable in September. Most respondents (45%) consider the state a “regulator.” Meanwhile, 19% view it as an “obstacle,” 2% — as an “enemy,” and 8% — as a “partner.” Another 25% could not define their position.
Among microbusinesses, 42% could not assess the state’s role, and only 25% see it as a “regulator.” Among small, medium, and large enterprises, this figure ranges from 35% to 57%. Micro and small firms most often describe the state as an “obstacle” (28% each), while large enterprises are more likely to see it as a “partner” (17%).
The New Monthly Enterprises Survey (NRES) by the IER covers up to 500 Ukrainian industrial enterprises located in 21 of 27 regions. The survey has been conducted monthly since May 2022.
📺Video presentation of September results (Ukrainian version):
https://www.youtube.com/watch?v=Nfy2UiB3JUc
📊All previous surveys since July 2022:
http://www.ier.com.ua/en/proekt_dilova_dumka/NRES_Presentations
