Thursday, August 31, 2023
Ukraine: Business is increasing its support for the Armed Forces and the population
Source: European Business Association
The results of the new quarterly survey “Business during the war” conducted by the European Business Association among its member companies demonstrate such a trend. Currently, 61% of the surveyed companies support their employees who are in the Armed Forces, while 56% provide financial support to the Armed Forces and the population. For comparison, in July 2022, 46% supported employees, and 34% provided financial assistance.
Moreover, 49% of companies continue to support the armed forces and the population with their own products, 26% provide services, 21% supply medications, and 18% offer protective/defense equipment. It’s encouraging that volumes of military and humanitarian assistance from businesses remain consistent and sometimes even increase.
The number of companies operating at full capacity remains stable at 69% of the EBA’s companies in the third quarter of 2023. Another 31% of companies are operating with certain restrictions. Among the most common restrictions are a reduction in geographical scope, closure of some branches/offices, and a transition to online mode.
The number of businesses that fully meet their salary payment obligations is increasing. Currently, 93% of businesses are doing so, which is higher than at the beginning of 2023 (89%) and July 2023 (61%). At the same time, the number of companies providing additional support funds has decreased from 28% a year ago to the current 12%. The highest allocation of additional funds by companies was observed at the start of the full-scale invasion (45% in March 2022) to support teams in difficult times and assist with relocation. Additionally, the number of entrepreneurs reducing employee salaries and laying off staff is decreasing. Currently, only 4% of respondents are reporting such actions.
The business maintains financial stability – the situation with reserves remains largely unchanged throughout 2023. Currently, 43% of participating companies have a “financial cushion” for more than a year, 25% for a year, 20% for six months, and 2% for a few months. Only 6% of businesses have no financial reserves.
For 16% of entrepreneurs, war-related losses have exceeded $10 million. Another 35% report losses in the range of $1-10 million, and 38% report losses up to $1 million. 19% of companies still have assets in occupied territories. These primarily include office and warehouse spaces, branches, production facilities and equipment, inventory, vehicles, and specialized machinery.
The number of mobilized workers in the member companies of the EBA has remained relatively unchanged over the past three months. Currently, in half of the companies (52%), up to 10% of the total conscripted workers have been mobilized. For 29% of companies, the number of mobilized employees reaches 10-20%, while 6% have 20-30% mobilized. Nearly half, specifically 47% of companies, have critical specialists for their operations who have been mobilized. These specialists include engineers, IT professionals, logistics experts, electricians, mechanics, technologists, and drivers.
The full-scale war and the associated challenges have significantly impacted companies’ investment plans in Ukraine. However, despite the difficulties, 35% of surveyed businesses have reported that they have implemented or plan to implement new major investment projects in Ukraine since February 2022. Among such projects, for example, are the opening of new plants or the expansion of existing facilities, the construction of warehouses and production spaces, farms, registration of new products, expansion of land bank, and investments in IT.
Moreover, to attract investment to Ukraine, the European Business Association together with Global Business for Ukraine have launched Investment map of Ukraine in terms of regions. More details can be read in the presentation attached.