Deterioration of economic conditions in April: analysis of the impact on Ukrainian business

In April of this year, Ukrainian business faced significant challenges, which caused the Business Activity Expectations Index (BACE) to fall to 49.4, compared to 51.8 in March 2025. This decline is a result of several factors, including worsening weather conditions, rising production costs, and uncertainty due to the geopolitical situation.

The main reasons for the decline in business sentiment were the prolonged uncertainty about possible further conflicts and changes in the international political context. These factors caused instability in production processes and a reduction in planned investments in business development.

Rising inflation and the weakening of the hryvnia exchange rate against the euro also affected the financial performance of enterprises, complicating the conditions for planning and forecasting. At the same time, stable consumer demand and the receipt of international financial assistance remained positive factors, which partially offset the negative impacts of the external environment.

Different trends were observed across sectors of the economy. Industrial companies showed the highest level of optimism due to stable demand for products and improvements in logistics, although with some pessimistic forecasts for finished product volumes.

Trading companies, despite stable demand, became less confident in production potential and turnover growth due to rising costs and difficulties in maintaining inventories. The construction sector was also affected by worsening weather conditions, which led to a reduction in construction and a slowdown in the growth of new orders.

The services sector, in particular, rates for services, were also affected by high security risks and a shortage of skilled labor, which led to a reduction in the provision of services and the forecast of future orders.

Despite the challenges facing Ukrainian businesses, optimism continues to be observed regarding a possible improvement in the conditions for conducting business. It is expected that the resolution of key issues, such as the stabilization of the political and economic situation, will allow businesses to refocus on developing and expanding their operations.