Over half of businesses in Ukraine anticipate performance to worsen in next 6 months - poll

MOSCOW. July 26 (Interfax) - As many as 56% of Ukrainian companies expect business trends in the country to worsen within the next six months, 27% do not expect any changes, and only 16% believe the situation will improve, as seen from a poll conducted by the European Business Association (EBA).

"Despite this, 47% of top managers plan to expand their businesses, including by increasing their customer base and production, enter international markets, etc.," Ukrainian media said referring to the EBA poll's findings.

At the same time, 45% of top managers surveyed see the standing of their businesses as fair and 27% as good, while 27% see the situation as rather negative.

The number of companies belonging to the association and working in full-scale mode has declined to 64% from 78% at the start of the year.

Hence, the number of limitations currently applied by companies has grown, with 36% of the respondents operating with limitations, the most common reasons being a shortage of skilled employees or mobilization (75%), geographical restrictions (60%)l and suspension of operations during air raid alerts (46%).

The revenues of 48% of businesses have declined, 47% grown, and 6% have not changed since the start of the crisis, it said.

Nearly half of those polled, 48%, export their goods or services abroad.

Among the factors that have had the strongest negative influence on their business, 71% of the respondents mentioned mobilization, 61% damage caused to the Ukrainian power infrastructure, 58% the crisis, and 58% a shortage of skilled employees, the EBA said.

The business community has remained financially stable on the whole, although it has somewhat worsened its assessment of financial reserves compared with the early 2024. More than half of the companies, 53%, have reserves that would be enough to operate for a year or more (65% during the previous poll), 32% for half a year, 15% for several months, and 1% have no reserves at all.

The poll has found that business losses from the crisis keep growing. As of mid-2024, 26% of the businesses polled estimated them at under $1 million, 31% at ranging from $1 million to $10 million, and 17% at over $10 million, while only 14% said they did not incur losses.

Only 9% among the association's members have relocated their offices or manufacturing assets because of the crisis, including 7% within Ukraine and 2% abroad.

Only 11% of companies have taken advantage of government or international support programs over the past 2.5 years.

The poll showed that 73% of companies plan to draw financing to develop their business, including 60% planning to use their own resources, 19% to apply for bank loans, 15% investments, and 5% grants. As many as 25% of the businesses polled stand ready to borrow from banks on market terms.

Among the problems in obtaining financing, companies have mentioned high interest rates, non-resident beneficiaries, unfeasible timeframes, and slow decision-making processes.

The poll of 95 top managers from companies belonging to the EBA was conducted from June 7 to 25, 2024.