Key findings:
- Staff shortages have reached a historic high: 69% of respondents consider this the #1 obstacle to doing business during the war.
- Resource costs and security risks remain among the main challenges.
- The energy situation is improving: power supply interruptions are no longer among the most acute problems, with their relevance at 20%.
- Assessments of the government’s economic policy remain restrained: there are still four times as many pessimists as optimists.
"Labor shortage" leads among the main obstacles to doing business in wartime, and in May, this problem intensified even further. It already worried a record 69% of businesses — the highest figure since the beginning of the monthly surveys.
This is evidenced by the results of the 49th monthly survey conducted by the Institute for Economic Research and Policy Consulting (IER) among 469 industrial enterprises.
"For several months, the 'labor shortage' obstacle has been breaking records. This obstacle has remained in first place for more than a year and a half. Moreover, in May, it reached such a high result as 69%. Businesses are worried about the lack of personnel," said IER senior researcher Yevhen Anhel.
In May, there was a slight decrease in the difficulty of finding qualified workers — the share of enterprises that found it harder to find such employees fell from 62.3% to 60.6%. Unskilled workers are more difficult to find — for 38.4% of those surveyed in May, compared to 34.3% in April.
Only 2.4% of enterprises plan to increase employment in the three-month perspective, while 5.1% plan to send employees on forced leave.
The second position among the main obstacles is held by "rising prices for raw materials, supplies, and goods" — the indicator decreased slightly from 56% to 49%.
The share of those worried about the "danger of working" decreased slightly: this problem became an obstacle for 44% of businesses, down from 46% in April, which allows it to hold third place for the fourth month in a row.
The pattern of the "danger of working" obstacle remains dependent on the size of the enterprise. Medium and large enterprises mention this problem more often — in May, 48% and 47% respectively, as they are more likely to become targets of enemy attacks.
"Regionally, the obstacle is very relevant, primarily in front-line and central regions — over 80% of those surveyed in Kyiv, Vinnytsia, Odesa, Zhytomyr, Zaporizhzhia, and Dnipropetrovsk regions. In the west of the country, this obstacle is less relevant. The only exception is the Rivne region," said Yevhen Anhel.
However, there are noticeable changes regarding two other obstacles. The obstacle "decrease in demand for products/services" increased from 26% to 38%. In addition, logistical difficulties have intensified, as evidenced by the growth of the obstacle "difficulties in transporting raw materials or finished goods across the territory of Ukraine" from 24% to 30%.
No significant changes were recorded for other obstacles. "Corruption" and "unlawful demands or pressure from law enforcement or controlling authorities" remain "in the shadows" of the main obstacles — only 7% and 3% of those surveyed mentioned them in May, respectively.
"The relevance of the 'power supply interruptions' obstacle remains at a relatively low level — 20% in May, when compared to the winter attacks on our energy infrastructure," said Yevhen Anhel.
31% of enterprises temporarily suspended operations due to power outages in April, but mostly for short periods of time. At the same time, 41% of businesses worked continuously despite interruptions. Already 28% of businesses had no power outages, compared to 20% the previous month.
Average working time losses were 4% in April. The largest losses of working time were in micro and small enterprises (57%), among sectors — in the chemical industry (6%), and regionally — in Kyiv (13%) and the Sumy (9%) regions.
Assessments of the government’s economic policy remain neutral. "A large proportion of enterprises provide neutral assessments, in particular, 64% of those surveyed in May. The low share of positive assessments remains — 6%. At the same time, the share of negative assessments is 25%, and this gap between positive and negative assessments has persisted since the summer of 2023," summarized Yevhen Anhel.
The New Monthly Enterprises Survey (#NRES) by the IER involves up to 500 Ukrainian industrial enterprises located in 21 out of 27 regions of Ukraine. The survey has been conducted monthly since May 2022.
- Video presentation of the May survey results:https://www.youtube.com/watch?v=KTLrKbDjoRk
- All previous surveys since July 2022:http://www.ier.com.ua/en/proekt_dilova_dumka/NRES_Presentations?
