Pessimistic sentiments are growing among Ukrainian businesses: entrepreneurs increasingly cite the lack of personnel and the increase in the cost of resources as the main risks to their work, while security factors are being relegated to the background. In September, the Business Activity Recovery Index (BIRI), which is calculated by the Institute for Economic Research and Policy Consulting (IER), decreased from 0.08 to 0.05 after an increase in August.
The main challenges for companies were labor shortages (60%), price increases (55%), and security risks (51%). At the same time, more than half of enterprises (53%) reported difficulties in finding qualified employees.
The average duration of the portfolio of new orders decreased from 4.5 to 4.3 months. The share of companies with long-term contracts (for a year or more) decreased from 10% to 7%. Despite the fact that 65% of enterprises are already operating at 75% or more of their capacity, long-term uncertainty has increased to 38.7%. This means that two out of five companies cannot forecast their activities for a two-year horizon.
“In September, the results were the most pessimistic overall and cause great concern. Business confidence in the future weakened, the pace of recovery slowed down, and uncertainty in the long term continues to grow against the backdrop of constant pressure from problems with personnel, physical security due to the war, and rising prices,” said Oksana Kuzyakiv, Executive Director of IED.
The survey was conducted from September 16 to 30 among 475 industrial enterprises in 21 regions of the country as part of the New Monthly Enterprises Survey, which IED has been implementing since May 2022 to monitor the state of business during the war.
