The business environment continues to reduce the number of employees and aggravate the problem of finding qualified personnel, which may become a key factor for the Ukrainian economy in the next months.
These are the main results of the New Monthly Enterprises Survey (#NRES) of the Institute for Economic Research and Policy Consulting (IER).
According to them, in May the rating of obstacles for business has not undergone significant changes. The top three among them have remained unchanged for several months: the danger of working (an obstacle for 56% of respondents), labor shortages (49%), and rising prices (46%).
“56% said that the danger of doing business is the biggest obstacle – and such a high figure was not even at the beginning of the war. Large businesses complain most about this. Also, the problem of electricity supply has been actualized again: compared to April, twice as many businesses complain about it (21% – in April, 41% – in May),” the study quotes the words of IEI expert Eugene Angel.
At the same time, the IEI noted that for the first time in two years the percentage of Ukrainian industrial business operating at full capacity exceeded 15% and amounted to 18% in May, while in April the figure was 13%.
In addition, the percentage of companies that find it difficult to guess what will happen to operations in two years has decreased – from 38.2% in April to 30.9% in May.
The two-year uncertainty rate has been gradually declining since February of this year. Then it was 50.6%, now it is 30.9% and it is the lowest value since October 2022.
The IEI emphasized that a clear trend of stagnation or decline in positive expectations for the two-year period is noticeable.
“That is, businesses understand what they will be doing in two years’ time, but they don’t see that future as positive. Most likely because it is getting more and more used to the view that the war will last a long time,” explained Oksana Kuzyakiv, executive director of the IEI.
At the same time, she added that assessments of the financial and economic situation at enterprises and the general economic environment are growing in the six-month perspective. Accordingly, respondents do not expect deterioration of the situation either at their own enterprises or in the country’s economy as a whole.
Enterprises have had a stable order book for more than three months for almost a year now. The average term of new orders in May amounted to 3.4 months, which is slightly longer than in April (3.3 months), but corresponds to the level of March this year (3.4 months).
In addition, the Business Activity Recovery Index (BAI) increased from 0.33 to 0.40 (on a scale of -1 to +1) in May 2024 compared to April. As explained in the IEI, this was due to an increase in the proportion of businesses that reported that their business activity was better than in 2023, from 45.3% in April to 55.4% in May. Meanwhile, 15.1% (12% in April) said business activity had worsened, with nothing changed for 29.4% (42.7% a month earlier).
The May NRES survey included 534 Ukrainian industrial enterprises of all sizes located in 21 of Ukraine’s 27 regions. The field phase of the 25th wave of the survey lasted from May 20 to May 31, 2024.
Ukraine will kick off the UEFA EURO 2024 soccer championship with a match against Romania on Monday.
The match will kick off at 16:00 Kiev time at the Bayern Munich stadium. It will be officiated by a Swedish refereeing team headed by Glenn Nyberg.
According to the UEFA website, Ukraine will start with Andriy Lunin, Juhim Konoplya, Ilya Zabarny, Mykola Matvienko, Oleksandr Zinchenko, Taras Stepanenko, Mykola Shaparenko, Grigory Sudakov, Viktor Tsygankov, Mykhailo Mudryk and Artem Dovbik.
Ukraine will also play Slovakia on June 21 and Belgium on June 26 in the group stage of Euro 2024.
Ukraine has started negotiations with a number of countries that have expressed interest in holding a second Peace Summit, President Volodymyr Zelensky has said.
“Every step towards a just peace has attracted the attention of certain groups of summit participants and countries that have not yet joined but are interested in peace,” Zelensky said at the conclusion of the first inaugural Peace Summit in Bürgenstock, Switzerland, on Sunday.
According to him, “we already have countries that have expressed their interest in holding a second peace summit, and we have started negotiations with them.”
The head of state did not name the list of such countries.
He also noted that “these days, uniting 101 countries and an international organization, we have achieved a great success for Ukraine and all partners.” “And our fair goal is that all countries of the world join this noble cause,” summarized Zelensky.
On the margins of the Global Peace Summit in Switzerland, Ukrainian President Volodymyr Zelenskyy met with President of the Republic of Palau Surangel Whipps Jr.
According to the President’s Office, in the presence of the leaders, Ukrainian Foreign Minister Dmytro Kuleba and Palau Secretary of State Gustav Aitaro signed a Joint Communiqué on the establishment of diplomatic relations between the states.
The meeting between the presidents was the first high-level contact between Ukraine and Pacific Palau.
Zelensky thanked Surangel Whipps Jr. for supporting the territorial integrity and sovereignty of Ukraine and invited Palau to join the implementation of the “Environmental Security” clause of the Peace Formula. “It is very important that you have found the opportunity to come to the Peace Summit. Thank you for your clear position. The issues being discussed at the Summit are important not only for Europe, but for the whole world,” the Ukrainian head of state said.
In Ukraine on Sunday, June 16, is expected to worsen weather conditions, reports Ukrhydrometcenter.
“In most southern, central and Kharkiv regions heavy rains, in the afternoon in some areas hail and squalls 15-20 m/s (I level of danger, yellow),” – stated in the message.
The situation in the Ukrainian energy system next week will be perceptibly more difficult compared to the current week, said the Chairman of the Board of the NEC Ukrenergo Volodymyr Kudrytskyy.
“Next week will be more difficult for the energy system, because the heat wave will return and we will have a reduced capacity of nuclear power plants, if compared to the current week,” he said in an interview with Ukrayinska Pravda on Friday.
According to the NEC head, due to the massive shelling, the energy system has lost its reserve of strength and has become dependent on sudden changes in electricity consumption and weather, forcing it to balance by shutting down consumers.
“Our energy system, having lost more than 9 GW of capacity due to shelling, now has no reserve of strength. If earlier we had additional power plants that could be switched on promptly, we would overlap by switching on some hydro units or TPP units, now we simply do not have such a maneuver,” – explained Kudrytskyy.”
As previously reported, Energoatom announced that it would put a 1000 MW nuclear power plant unit under repair as part of a planned repair campaign in 2024. The company pointed out that, given this and the increase in electricity consumption in July, the generation deficit in the power system may increase.
Prime Minister Denys Shmygal noted that saving e/e will be part of Ukraine’s daily life in the coming years due to Russian attacks on the country’s energy sector.
