- A record 71% of enterprises identified labor shortages as their main obstacle in June.
- Rising prices for raw materials and security risks remain among the top challenges for businesses.
- Disruptions to electricity, water, and heat supplies are causing less concern among businesses than in May.
- Assessments of the government’s economic policy improved: the share of negative assessments declined, although most businesses remain neutral.
Labor shortages have become an increasingly significant obstacle to doing business during wartime.
“It is a paradoxical situation: on the one hand, difficulties in finding workers are declining, while on the other, a record 71% of enterprises now consider labor shortages an obstacle to increasing production,” said Oksana Kuziakiv, Executive Director of IER.
In Kirovohrad, Chernivtsi, Lviv, Cherkasy, Dnipropetrovsk, Poltava, Zhytomyr, and Zaporizhzhia regions, more than 80% of surveyed enterprises identified this as a concern.
These are the findings of the 50th Monthly Business Survey conducted by IER in June among 471 industrial enterprises.
In June, difficulties in finding skilled workers declined significantly: the share of enterprises reporting difficulties in finding qualified employees fell from 60.6% to 46.3%. At the same time, 30.4% of enterprises faced difficulties finding unskilled workers.
After seasonal adjustment, employment expectations remain stable and close to neutral. Only 4.6% of enterprises plan to increase employment over the next 3–4 months, while an even smaller share – 2% – plans to place workers on forced leave. Expectations regarding the number of employees on forced leave also show no signs of a new negative trend.
“These indicators vary considerably by region and enterprise size. Medium-sized enterprises face the greatest difficulties in finding skilled workers, while microenterprises face the fewest. Finding unskilled workers is most challenging for small and medium-sized enterprises,” Oksana Kuziakiv explained.
The second largest obstacle remains rising prices for raw materials, supplies, and goods. The share increased slightly, from 49% to 50%. This is higher than last winter but below the record levels seen in late 2022 and early 2023.
In June, the share of enterprises concerned about unsafe working conditions declined slightly, from 44% to 41%. This remains the third most significant obstacle to doing business during the war.
“There is still a clear correlation between perceptions of unsafe working conditions and enterprise size. Medium-sized and large enterprises report unsafe working conditions more frequently, as they often operate large infrastructure facilities that may be targeted by enemy attacks,” said Yevhen Anhel, Senior Research Fellow at IER.
As a result, more than 50% of large enterprises identify unsafe working conditions as an obstacle, compared with less than 30% of microenterprises.
More than 80% of respondents in Rivne, Odesa, Kyiv, Zaporizhzhia, and Dnipropetrovsk regions identified unsafe working conditions as an obstacle to doing business.
“The most noticeable change concerns the fourth-ranked obstacle. In May, 38% of respondents reported declining demand for their products and services, compared with 31% in June. At the same time, difficulties transporting raw materials or finished products within Ukraine remained unchanged at 30%,” noted Yevhen Anhel.
There was little change in concerns about disruptions to electricity, water, or heat supplies. The share declined by 1 percentage point compared with May, to 19%, keeping it in sixth place.
“Other obstacles, such as corruption and pressure from law enforcement agencies, remain relatively insignificant compared with the main challenges facing businesses. Only a few percent of respondents reported these problems: 4% in June, compared with 7% in May,” Yevhen Anhel emphasized.
In May, 27% of enterprises temporarily suspended operations due to power outages, mostly for short periods. At the same time, an equal share of businesses experienced no power outages, while 46% continued operating without interruption despite disruptions.
Average working-time losses amounted to 5% in May, in line with previous months. The largest losses were recorded among small and medium-sized enterprises (6%). By sector, the highest figure was reported in the chemical industry (10%), while by region, the largest losses were recorded in Cherkasy (18%), Dnipropetrovsk (16%), and Kharkiv (13%) regions.
The share of neutral assessments of the government’s economic policy increased to 70%, one of the highest levels recorded. At the same time, positive assessments remained low, at just 5% in June.
“The share of negative assessments fell to 20% in June, from 25% in May and 29% in April. The gap between positive and negative assessments remains,” Yevhen Anhel noted.
In June, 53% of respondents described the state as a “regulator” for business. “This is the highest figure recorded since 2023. Another 10% described the state as a ‘partner’ and 1% as a ‘friend’ of business,” Yevhen Anhel reported. At the same time, 20% of enterprises consider the state an “obstacle” to doing business.
Larger businesses tend to have a more positive view of the state’s role: 59–60% of medium-sized and large enterprises describe the state as a “regulator”. By contrast, only 28% of microenterprises share this view. Among microenterprises, 31% consider the state an “obstacle”, compared with just 10% of large enterprises.
The IER’s New Monthly Enterprises Survey (NRES) covers up to 500 Ukrainian industrial enterprises located in 21 of Ukraine’s 27 regions. The survey has been conducted monthly since May 2022.
The video presentation of the June survey results is available at this link.
