EBRD, USA and Sweden assess impact of war on SMEs in Ukraine
March 2, 2023

EBRD, USA and Sweden assess impact of war on SMEs in Ukraine

Research commissioned by the European Bank for Reconstruction and Development (EBRD) shows that a majority of small and medium-sized businesses (SMEs) surveyed in Ukraine had stabilised their activity almost a year after the Russian invasion.

The survey showed that 57% of the 166 respondent SMEs had maintained their pre-war activity, 6% had suspended their operations and 37% were operating with a reduced output. The results were obtained at the end of December 2022.

Respondents reported a considerably negative impact on their businesses. On average, income decreased by 43% and employment by 22%. However, most of the SMEs interviewed continue to operate and make short-term forecasts and strategies, even if their planning horizon has shortened from several years to a one-month period. 

According to the research, the top five problems small businesses face are: a decrease in demand and loss of market outlets (77%); cost increases (70%); a decrease in labour productivity (68%); an inability to forecast and build long-term strategies due to uncertainty (68 %); and an inability to increase salaries for employees (55%). Production companies cited broken supply chains amongst their top five problems (67%), compared with 52% of the broader SMEs.

The SMEs that have been hit the hardest by the impact of Russia’s war on Ukraine are those located near the fighting in the country’s eastern, northern and southern regions. Businesses have been forced to relocate to the more secure western regions of Ukraine to protect employees, save equipment and restart operations.

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