Industrial production growth slows to 3.6% y/y in 2024

Industrial production growth in Ukraine slowed to 3.6% y/y last year, while in 2023 industrial production grew by 6.8% y/y. Since the beginning of the war, Gosstat has published only industrial production indices, without disclosing volumes in physical terms.

The decline in output rates last year was due to the influence of such factors:

• disruptions in energy supply due to missile strikes on the energy infrastructure throughout the spring-summer of 2023;
• increased production costs due to rising energy prices and hryvnia devaluation;
• labor shortage.

Last year from January to May, industrial production growth was recorded: after a 17.2% jump in January, the recovery slowed to 3.6% in May; in summer, a decline from 0.3% in June to 1.5% in July and 4.3% – in August was recorded, followed by a slight increase of 1.3% and 0.9% in September and October, respectively.

The hardest hit sectors last year were coal mining (-11.7% y/y), chemicals (-9.9% y/y) and wood processing (-8.8% y/y)

Thanks to the operation of the maritime corridor, mining and metallurgical companies were able to increase production and exports. Last year, output in the metal ore mining and metallurgy sectors grew by 23% and 19% respectively. Among other sectors, the food industry (6.2%) and the production of construction materials (4.2%) showed the highest rates of industrial production.

Sales of industrial products (goods, services) in 2024 amounted to UAH 3.7 trillion (+12% y/y), including UAH 680 billion (+24% y/y) outside the country. In the total volume of sales, the largest share of sales came from the processing industry (59.9% vs. 56% in 2023), electricity and gas supplies (27.2% vs. 31.2%) and mining and quarrying (remained at 11.7%).