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Russian missile attacks have significant impact on work of Ukrainian business in Nov 2022 – study
KYIV. Dec 20 (Interfax-Ukraine) – Power outages topped the list of obstacles to doing business during the war in November, and security again came in third place, according to the results of the seventh monthly survey of enterprises "Ukrainian business during the war" conducted in November 2022 by the Institute for Economic Research and Policy Consulting (IER).
"This began to happen back in October: then, from 4% in September to 51% in October, the proportion of those who indicated power outages as a problem increased. Now there are 70% of respondents, which makes this the number one problem for business," IER Chief Executive Oksana Kuzyakiv said in the presentation.
Also, after several months of decline, the share of entrepreneurs who indicated a security problem continued to grow. In particular, almost half of the respondents – 46% in November versus 33% in October and 18% in September – chose the indicator "dangerous to work" as an obstacle to starting a business.
"This is the largest share for the entire period of the survey [before that, a maximum of 34% was in the first May survey]. Since May, there has been a tendency to reduce the weight of this indicator among other obstacles to starting a business," the expert said.
More than others, this problem was indicated by large enterprises (more than 250 employees) – 56.6%, while in companies up to 10 people this was a problem only for 15.1% of respondents.
The second place in the rating of problems in November was occupied by the rise in prices for raw materials, material and goods, which lost the lead, by 68% versus 70% in October.
Difficulties with the transportation of raw materials and finished goods across Ukraine moved to fourth place from third – 33% versus 41%, and the top five problems are closed by a decrease in demand for goods/services – 30% versus 29%.
The IER said that according to the results of the November study, which surveyed 507 enterprises, the downward trend in assessments of changes and expectations of the general economic situation and the financial and economic situation at enterprises in the six-month outlook continued.
Also in November, compared to October, fewer enterprises plan to increase production in the next three or four months. At the same time, the share of enterprises that planned to cut production remained almost unchanged. Most respondents plan to keep production volumes at the same level next month.
In addition, IER experts drew attention to the downward trend and deterioration in sales and new orders expectations: the balance of estimates dropped to almost zero.
As for business plans for the two-year outlook, the percentage of enterprises that cannot provide for such a long-term outlook has grown significantly – from 42.3% to 54.2%. Among the rest, the share of optimists who plan to expand their activities decreased from 37.5% to 31.6%, while the percentage of pessimists who are going to reduce it increased from 6.3% to 11.6%.
The missile strikes had no effect on recovery volumes, but they slowed down active recovery. The share of enterprises operating at full and above full capacity has decreased. At the same time, the percentage of businesses operating near full capacity grew.
In November of this year, the assessments of the government business support policy improved, according to the study.