Economic activity in Ukraine

According to the NBU’s monthly macroeconomic survey, economic activity in both the manufacturing and services sectors continued to recover in May. The number of enterprises that shut down completely fell to 14% in the second half of May (17% in April), but the overall capacity utilization level remains 40% below pre-war levels. The loss of markets and increasing price pressure are holding back the recovery, but the assessment of the strength of enterprises has improved. In May, the number of enterprises that do not experience problems with lack of resources increased (to 36%), 40% of respondents will have enough resources for more than a month.

MMI

Some manufacturers continue to deconserve and increase capacity due to the abolition of customs duties by Western countries. Some companies report the creation of new export and logistics corridors.

The mining industry

Coal production by state-owned mines has fallen by 37% since the start of the war; some private companies continue to mine and increase hiring to increase volumes. Gas production is increasing due to the launch of new inter-industrial gas pipelines in the central and eastern regions; some private companies brought mining to pre-war levels.

Energy

Due to the lack of coal, Zaporizhzhya TPP, Slovyanska TPP and Kharkiv TPP-5 have been shut down, but 7 of the 15 NPP units are in operation. Energoatom has connected new capacities for electricity production. Most of the destroyed energy infrastructure, gas and electricity supply have been restored in the occupied territories.Exports of electricity to Moldova have started as a result of declining domestic consumption. Ukrhydroenergo is ready to start exporting electricity to Poland.

Food Industry

With the return of the population, food producers resume work in the deoccupied territories, introduce new and deconserve old facilities in the regions. Excess raw materials and the reorientation of Western and central consumers to more affordable and cheaper domestic products support the level of output. The industry is constrained by export restrictions, declining purchasing power and rising production costs due to logistical difficulties and rising energy prices. Some manufacturers support production volumes, shifting from the Ukrainian to the European market.

Engineering

Mechanical engineering is supported by the needs of the energy, transport and mining industries and the production of special equipment, in particular through foreign orders and government orders. Entreprises focused on the Western automotive industry began to resume production

Pharmaceutics

Some large pharmaceutical companies have reached the pre-war level of production, in particular by producing drugs for defense and increasing export opportunities. A number of manufacturers have mastered the production of new products. At the same time, the demand for veterinary drugs decreased significantly against the background of reduced restrictions on market access by regions with active livestock fighting of farm animals.

Agro

Sowing of spring cereals and legumes as of May 26 was completed by 78% of last year’s figures (13.2 million hectares or 93% of the plan of the Ministry of Agriculture for this year, the plan of 14.2 million hectares, which is 16% less than last year). Farmers continue to optimize the structure of crops: reduce the land under corn, instead increase the crops of wheat, soybeans, buckwheat.

Transport

There is a significant recovery in the transport sector: freight traffic by Ukrzaliznytsia has recovered to 45% of pre-war capacity, an additional border crossing has been opened for grain cargo transportation

Construction

Housing construction has resumed in all regions remote from hostilities; the first resumption of construction began in deoccupied cities. Construction of the restoration of transport infrastructure and the creation of new production facilities in safe areas (construction of factories, granaries, etc.) also support the sector. Manufacturers of construction products are beginning to adjust due to growing demand.