Each branch of industry is important, but our country must decide on priorities in order to correctly allocate investments and maintain aggregate indicators of economic growth. According to the data YouControl, the sectors that, according to the Ukrainian government, have the greatest potential for development and high investment interest are energy, the agro-industrial complex and the food industry, the transport and logistics industry, the extraction and production of critical materials, information technologies, and the machine-building sector. It is these industries that ensure the development of the economy and demonstrate a growth trend.
In 2022, the economy of Ukraine fell by 30%. The industrial enterprise suffered even more significantly – by 36.7%. Among the industrial sectors, metallurgy suffered the greatest losses. 426 enterprises were destroyed or damaged. In particular, we lost PJSC “Azovstal Metallurgical Plant”, PJSC “MMK named after Ilyich” and PJSC “Avdiiv Coke Chemical Plant”. In general, the Donetsk region suffered the greatest losses – almost half of the total amount for Ukraine.
Industry is recovering and maintaining a positive trend
In 2023, Ukraine’s industry began to recover after significant losses caused by the war. This became possible thanks to several factors. First of all, the domestic demand for products has increased, in particular those that meet the needs of the Armed Forces of Ukraine and infrastructure reconstruction. The adjustment of the electricity supply also played a role, which made it possible to stabilize production processes. In addition, the relocation of enterprises from war zones to safer regions made it possible to resume their activities. The liberalization of access of Ukrainian goods to the markets of other countries, especially the European Union, has opened up new opportunities for export. An important step was the diversification of logistics routes, which ensured the stability of supplies to the international market.
Infographic: IA “FACT”
The result of these changes was the growth of industrial production: in 2023 it increased by 6.8% compared to the previous year. In the first half of 2024, positive dynamics persisted — industry grew by 8.1% compared to the same period in 2023.
If we talk about individual industries, the processing industry achieved the greatest progress: in the first half of 2024, it grew by 11%. The mining industry also continued to recover, increasing production volumes by 5.6% compared to the corresponding period of the previous year.
Metallurgical industry: recovered thanks to the “sea corridor”
According to the results of January – September 2024, Ukraine improved its position in the world ratings of the metallurgical industry. In pig iron production, the country rose to 13th place, up from 16th in 2023. Progress was also recorded in the ranking of steel producers: Ukraine took 20th place, while in 2023 it occupied the 24th position.
The restoration of metallurgical production in Ukraine in 2024 was facilitated by the stable functioning of the sea corridor. Commander of the Naval Forces of the Armed Forces of Ukraine, Vice Admiral Oleksiy Neizhpapa, reported, that in 2024 the Navy successfully ensured the safe passage of 9,061 ships through the sea corridor. Of them, 4,651 ships arrived in Ukraine, and 4,410 went to other ports. This made it possible to export more than 74.4 million tons of cargo.
As we already wrote, the sea corridor ensured the transportation of products to international markets, which made it possible to significantly increase the volume of exports of rolled metal.
In the nine months of 2024, it increased by 55.1% compared to the same period in 2023 — from 2.142 million tons to 3.323 million tons.
In the first half of 2024, a decrease in production by 0.9% was recorded in mechanical engineering compared to the same period in 2023. The main reason was problems with access to electricity due to long blackouts. This has had the greatest impact on energy-intensive enterprises, especially in heavy engineering, where power needs are difficult to meet with the help of autonomous energy sources.
At the same time, government orders, including defense orders, contributed to the growth of production in certain segments. In particular, the production of vehicles increased: railway locomotives and rolling stock – by 13.7%, and military vehicles – by 7.9%.
Defense industry: a priority branch of Ukraine’s economy
The defense industry, as before, continues to play a key role in the recovery of Ukraine’s economy. In 2022, the Ministry of Defense spent UAH 242 billion on armaments, and in 2024 this amount increased to UAH 772 billion. The budgets of other law enforcement agencies increased by 40-80%. In addition, tens of billions of hryvnias were allocated to departments that had not previously purchased weapons. Ukraine makes maximum use of the capabilities of its defense enterprises and increases spending on military equipment every year.
Increasingly, the armed forces are receiving weapons manufactured by Ukrainian manufacturers. In the first six months of 2024, the MoU adopted almost 480 new units of equipment and weapons, of which about 290 are domestic developments. The main areas of production include armored vehicles, naval and radar systems, precision weapons, ammunition, aviation and aircraft repair. During 2024, Ukraine spent more than UAH 265 billion on the purchase, production and repair of weapons, paying special attention to drones, shells, cartridges and armored vehicles.
Reportedly Ukrinform, during the year the following were developed and put into operation:
- 251 types of unmanned aircraft systems (BpAK/BpLA). These modern drones perform reconnaissance, corrective and strike missions, reducing risks to our military.
- 169 types of ammunition. High-quality ammunition is the basis for effective frontline operations, and our specialists are constantly working on improving it.
- 153 types of radio-electronic warfare (ERB) and reconnaissance (ER) means. In the conditions of modern warfare, it is important to be able to detect and block enemy signals.
During the past year, IOU continued the integration of NATO standards for our manufacturers. In addition, the process of submitting applications for certification was automated, which significantly reduced time and increased the transparency of procedures.
The most important thing task of the industry for the year that has begun – to manufacture weapons that Ukraine used to buy abroad.
Food industry: Best adapted to power outages
High harvests, stable demand in the domestic market and established export logistics (in particular, the stable operation of the sea corridor) enabled the development of food processing. In the first six months of 2024, growth in this industry amounted to 15.9%. The fastest growing were the production of sugar (39.4%), oil and animal fats (37.4%), processing and canning of fruits and vegetables (30.1%), as well as processing of fish, crustaceans and molluscs (10.4%).
Dmytro Zozulya, Deputy Chairman of the Board of MHP for M&A emphasized, that there are many industries with great export potential in Ukraine. However, he believes that in order to enter international markets, it is necessary to unite and offer products with added value. He emphasized that Ukraine should become an important player in the global food market, and the next step for this is the unification of domestic food producers to create a competitive ecosystem.
Analysts point out, that the food industry is best prepared for power outages among other industries.
Chemical industry: dependence on imported raw materials
As of September 1, 2024, about 3,600 enterprises are operating in the chemical industry, which is almost 50% of the total number of registered enterprises (7,500). However, only 10-15% of large and medium-sized enterprises are operating at full capacity, and they produce almost 80% of chemical products and chemicals.
Despite the risks of the war, the chemical industry was able to maintain a significant part of its potential thanks to the adaptation and stable operation of enterprises, as well as domestic demand. A positive trend is the growth of the production of rubber and plastic products, which changed the structure of the industry in favor of more high-tech products for final consumption. In January-September of this year, the share of rubber and plastic products in the structure of sales of chemical products exceeded 50%. However, this sector is mostly dependent on imported raw materials, which account for 95-96% of production, as Ukraine produces almost no primary plastics.
Light industry: production decline
In the first half of 2024, the light industry of Ukraine faced a decrease in production: the total decline was 3.9%. Clothing production fell by 10%, leather and leather goods production by 1.1%, while textile production showed a slight increase of 1.9%.
The negative dynamics is explained by several factors. First, enterprises have lost a significant part of foreign orders, which were previously a key source of capacity utilization. Secondly, interruptions in the supply of electricity forced many enterprises, especially small and medium ones, to purchase autonomous power sources. This increased the cost of production and reduced its competitiveness against the background of cheaper imported goods. The third challenge was the shortage of qualified workers, in particular engineers and operators of special equipment, which made it difficult for the industry to operate stably.
The insufficient volume of foreign orders led to a deepening of the negative foreign trade balance. In 2022, imports exceeded exports by 3.6 times, in 2023 – by 6.9 times. In the first eight months of 2024, the ratio returned to the 2022 figure, but the problem remains significant.
Thus, the structure of the Ukrainian industry at the beginning of 2025 is characterized by gradual recovery and adaptation to new realities, with an emphasis on the development of the processing industry, defense industry and the introduction of environmentally sustainable technologies.
