Business conditions in the Dnipropetrovsk region have changed only slightly over the past year, according to a survey by the European Business Association among its regional companies. The overall business environment in Dnipro is rated at 2.20 out of 5 (compared to 2.25 in 2023).
However, business sentiment has shown a slight decline. Currently, 75% of entrepreneurs describe the business conditions in the region as challenging, compared to 69% last year. At the same time, 25% consider the conditions to be satisfactory.
Over the past year, the number of companies operating at full capacity in the region has decreased from 38% to the current 20%, with the remaining 80% working with certain limitations.
Companies cite mobilization issues and difficulties with reserving employees as urgent challenges. Power outages also significantly impact business operations, especially in Dnipropetrovsk, an industrial region. Among the region’s companies, 20% were forced to relocate within Ukraine, while another 10% relocated but have since returned.
Currently, 60% of companies report that up to 20% of their employees are serving in the Armed Forces of Ukraine (AFU), 25% report 20-30%, and 5% report 30-40%. Overall, volunteers or mobilized employees are present in 90% of the surveyed companies in the region. The idea of implementing economic reservation is supported by 65% of the surveyed companies.
Among the factors positively influencing business operations, companies note established relationships with local authorities, digitalization of public services, the activity of relocated businesses and people, business involvement in reconstruction efforts and support for the AFU, the presence of state orders, and the movement toward European integration.
According to respondents, improving business conditions can be achieved by ensuring an effective and transparent reservation procedure, restoring and maintaining infrastructure, and ensuring transparency in legislation and uniform “rules of the game.”
Entrepreneurs in the Dnipropetrovsk region are generally satisfied with the work of most local authorities they interact with, including the regional tax service, customs, the regional military administration, the National Police, and the courts. However, businesses see a need for improvement in interactions with the Dnipro City Council and territorial recruitment and social support centers.
The losses of entrepreneurs in the region since the beginning of the full-scale invasion have been significant. All survey participants reported losses, with a quarter (25%) experiencing losses of more than $10 million. Another 30% reported losses of up to $1 million, and 45% reported losses in the range of $1-10 million.
For the second consecutive year, in addition to maintaining operations during martial law, companies are focusing on digitalizing business processes and entering new markets. Regarding the end of the war, 35% of respondents believe it will happen in the next year (2025), while 25% think it will occur within one to three years, and 15% believe Ukraine will remain in a state of war for an extended period.
According to businesses, the successful rebuilding of the region should be based on combating corruption and establishing the rule of law, strengthening defense capabilities, restoring and diversifying energy infrastructure and logistics, creating a favorable tax environment, revitalizing industry, reducing bureaucracy, attracting private investment, and supporting the population.
For reference:
The survey was conducted among member companies of the Dnipro office of the European Business Association from July 1 to 30, 2024. The full report is available via this link.
Source: https://eba.com.ua
