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Ukraine’s small and medium enterprises stabilise activity despite the war – EBRD survey

Ukraine’s small and medium enterprises stabilise activity despite the war – EBRD survey

The impact of the Russian war on Ukrainian small and medium-sized enterprises (SMEs) is significant and generally negative, but most companies continue operating and planning for the future, according to a survey commissioned by the European Bank for Reconstruction and Development (EBRD) almost a year after the Russian invasion.

57% of SMEs maintain their pre-war activity, 37% operate but have reduced their output, and 6% have suspended their operation. For 43% of businesses revenues declined, and 22% reported a drop in employment.

Among negative trends, SMEs named a drop of business activity, loss of income, decrease in the number of orders, total cost reduction, deterioration of payment discipline, increased staff turnover, destruction of energy infrastructure, and relocation.

On the other hand, the crisis in certain cases turned out to be a development opportunity

Some companies received new orders and expanded sales, businesses shifted to manufacturing products with high added value. Moreover, businesses are becoming more efficient, searching for creative ways to make profit and become more proactive in looking for export opportunities.

The research has been conducted in two stages: qualitative survey (16 expert interviews) and quantitative representative research (150 telephone interviews) of SMEs in production and service sectors, covering all regions of Ukraine, except those temporarily occupied. The results were obtained as of the end of December 2022 and identified the negative and positive trends, key problems and needs of businesses.

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