Mining & metals companies generate every eighth hryvnia of Ukraine’s GDP

A contribution of the sector to Ukraine’s GDP in 2018 was ₴408 billion or 12%, according to the calculations by GMK Center obtained on the basis of analysis of the Cost-Performance table. These data reflect a complex effect, including mining & metals companies, activities of suppliers and consumer spending of employees.

The steel industry is a fundamental sector of the economy not only in Ukraine, but also in major economies worldwide. This is manifested in the number of jobs and GDP share generated by the steel industry in related sectors. One Ukrainian steel worker creates 2.2 jobs in related industries: power industry, transport, mechanical engineering, etc.

One hryvnia of added value in the steel industry generates ₴4.7 of added value in related industries. This is how the sector basically operates. Mining & metals companies provide jobs and orders for entire sectors of the economy.

The mining & metals sector is a systemic employer that retains personnel in the country. The share of the mining & metals sector in the total wage fund is 11% or, conditionally, every tenth hryvnia. Every 13th employee in Ukraine depends on the steel industry. Steel worker’s salary is 28% higher compared to the average in Ukraine. The stable operation of the mining & metals sector is therefore extremely important for the stability of the country in the period of crisis.

Yet, the mining & metals sector is much more important for the regions of presence. These are four oblasts where the largest enterprises are located: Dnipropetrovsk, Donetsk, Zaporizhzhya, Poltava. The share of the mining & metals sector in the economy of these regions is 39%. This means that business activity of the above oblasts depends on steelmaking.

The sector is the largest industrial investor. Last year, steelmakers’ investment increased by 20% to ₴30.5 billion. This is every seventh hryvnia of industrial investment. In 2018, Ukrainian mechanical engineers received orders from steelmaking companies worth some ₴20 billion. This is important, given the desire of our country to increase manufacture of high added value products.

Mining & metals companies are large taxpayers. The implementation of budget programs at both local and national levels depends on their operation. The share of the mining & metals sector in the income tax revenues is around 12%. Nineteen steelmaking companies are among the top 100 taxpayers in Ukraine.

For more details on the contribution of the mining & metals sector to Ukraine’s economy see infographics of GMK Center.