Leading indicators point to a decline in business confidence in the fall of 2025 due to a significant electricity shortage for industrial consumers following attacks on energy infrastructure. Against this backdrop, economic indicators have mostly moved into negative territory, although they border on cautious optimism and a moderate assessment of macroeconomic prospects. It is clear that a significant improvement in business confidence is only possible if hostilities cease and the energy supply situation improves.
The key problems for the Ukrainian economy in 2026 may be the high intensity of hostilities, electricity shortages due to systemic damage to energy facilities, tariff pressure from state monopolies, and labor shortages. In such conditions, Ukrainian businesses have no reason for high optimism, which is reflected in the level of leading indicators.
In November 2025, the business confidence indicator in industry deteriorated to -8.8% from -7.3% in October. The same indicator in the manufacturing industry fell by 0.6 percentage points in November to -9.2%. This indicates that business confidence fell amid intensified shelling of energy infrastructure in the fall and the resulting serious disruptions in the supply of electricity to industry.
The most “long-term” leading indicator is the Business Expectations Index (BEI), which is calculated quarterly by the National Bank (NBU) and records the expected development of enterprises for the next 12 months. In the third quarter of 2025, the BEI fell to 102.5% from 103.1% in the second quarter. An index value above 100 indicates a predominance of positive economic sentiment, while a value below 100 indicates negative sentiment.
Business respondents expect growth in the production of goods and services and are positive about the development of their own enterprises, despite a moderate increase in inflation and exchange rate expectations, as well as cautious estimates regarding an increase in the number of personnel.
Over the next 12 months, businesses expect (as of Q3 2025 compared to Q2):
- an increase in the production of goods and services: 6.1% vs. 9.2%;
- a deterioration in the financial and economic development of enterprises: -4.5% vs. -5.3%;
- an increase in inflation: up to 11.4% vs. 10.9%;
- accelerated devaluation: average value – up to 44.1 UAH/USD vs. 43.8 UAH/USD.
At the same time, these estimates do not yet take into account the intensification of shelling of energy infrastructure in the fall, which led to a decline in the business activity expectations index in November into negative territory.
It should be noted that the 2026 state budget assumes the following indicators: inflation – 9.9% y/y, exchange rate – UAH 45.7/USD. According to a survey by the European Business Association, the average dollar exchange rate that businesses are assuming in their budgets for 2026 is UAH 46/USD.
The economic sentiment indicator (ESI) in Ukraine, calculated by the State Statistics Service, fell to 108% in the fourth quarter of 2025 from 109.6% in the third quarter. In the first and second quarters of 2024, it was 105.7% and 109.4%, respectively.
Among other leading indicators, it is worth noting investment expectations, which are on average better in industry than in machine building, one of the sectors serving the needs of defense. At the same time, metallurgy shows negative investment expectations amid increased tariff pressure from state monopolies, weakness in the global steel market, and the introduction of CBAM without concessions for Ukraine.
Source: https://gmk.center
