In August, 69% of enterprises reported a shortage of workers, while 48% cited the risks of operating during the war

• In August, 69% of businesses identified labour shortages as the main obstacle to doing business.
• Unsafe working conditions were a concern for 48% of businesses.
• Rising prices for raw materials and goods concerned 50% of businesses.
• Assessments of the government’s economic policy deteriorated: the share of positive and neutral assessments fell, while the share of negative assessments increased from 23% to 29%.

Staff Shortages

Labour shortages intensified again in August after becoming less pressing in July. The share of businesses that identified staff shortages as the main obstacle to doing business increased from 66% to 69%.

This is according to the results of the 52nd New Monthly Enterprises Survey conducted by IER in August among 465 businesses of all sizes.

“Labour shortages are the No. 1 obstacle for our respondents. And this situation has persisted for about two years,” said Yevhen Anhel, IER Senior Researcher.

Businesses faced slightly greater difficulties in finding workers. The share of businesses reporting greater difficulties in finding skilled workers increased from 54.3% to 58.1%, while the share reporting greater difficulties in finding unskilled workers rose from 34.4% to 36.4%.

At the same time, businesses do not expect significant changes in employment over the next 3–4 months. Only 2.6% of businesses plan to increase the number of employees, while 8.2% plan to reduce their workforce. Another 3.4% of respondents plan to place employees on forced leave.

What Else Concerns Businesses

The top three obstacles to doing business remained unchanged in August: labour shortages, rising prices and safety risks.

The share of businesses that identified “rising prices for raw materials, supplies and goods” as an obstacle fell from 57% in July to 50% in August, but the issue remained in second place.

Meanwhile, “unsafe working conditions” became a more pressing concern, with the share rising from 44% in July to 48% in August.

“The August figure of 48% is above the 42–46% range recorded over the previous six months, amid intensified attacks on infrastructure, industrial and logistics facilities. Businesses are concerned about their safety, but at the same time they have already become accustomed to the danger and very often mention other obstacles,” said Yevhen Anhel, IER Senior Researcher.

The figures varied by business size, with the issue cited most often by medium-sized and large businesses. More than 80% of respondents in the Kyiv, Zaporizhzhia, Dnipropetrovsk and Rivne regions considered unsafe conditions an obstacle to doing business.

“Declining demand for products and services” remained in fourth place, with its share falling from 33% to 27%. “Difficulties transporting raw materials or finished goods within Ukraine” became less pressing, falling from 29% to 26%, while “supply chain disruptions” increased from 16% to 19%.

The share of businesses that identified “disruptions in electricity, water or heat supply” as an obstacle fell from 11% to 9%, while the issue remained in eighth place.

In July, businesses lost 4% of total working time due to power outages, with the greatest impact reported in the metallurgy and metalworking sector and in Dnipropetrovsk and Sumy regions and Kyiv. Some 16% of businesses temporarily suspended operations.

How Businesses Assess the Government’s Economic Policy

In August, the share of positive assessments of the government’s economic policy fell from 8% to 5%. The share of neutral assessments declined from 65% to 60%, while the share of negative assessments increased from 23% to 29%.

“The share of negative assessments returned to a high of 29%, a level last seen in April. The gap between negative and positive views has therefore remained significant since summer 2023,” noted Yevhen Anhel.

Up to 500 Ukrainian industrial businesses participate in IER’s New Monthly Enterprises Survey (NRES), covering 21 of Ukraine’s 27 regions. The survey has been conducted monthly since May 2022.

A video presentation of the August survey results is available here.