Industrial production fell by 0.4% y/y in January–April

Industrial production in Ukraine fell by 0.4% year-on-year in the January–April period. This is linked to a decline in economic activity caused by power shortages resulting from attacks on energy infrastructure. This was reported by the State Statistics Service.

The industrial production growth rate in April rose by 1.2% compared with April 2025. The extractive industry recorded a 4% year-on-year increase in April. The manufacturing sector increased output by 1.3% compared with April 2025. In the supply of electricity, gas, steam and air conditioning, production fell by 14% year-on-year.

The key factors behind the economic contraction over the four-month period include the following:

1. Electricity shortages. As a result of shelling of energy infrastructure in January, many industrial enterprises partially or completely halted operations.
2. Cold winter. Low temperatures brought work to a standstill at most construction sites, leading to a 4.7% year-on-year decline in construction output in January–March.
3. Rising energy costs. Due to the escalation of the situation in the Persian Gulf, prices for gas and petroleum products in Ukraine have risen significantly. At the same time, the electricity shortage has led to a rise in the cost of electricity itself.
4. Impact of the CBAM. Ukraine did not receive a deferral or exemption from the CBAM, which led to the loss of 1.1 million tonnes of export orders from the EU for metallurgical products and a 7–9% reduction in steel and rolled steel production.
5. Restrictions on maritime logistics. Due to electricity shortages and damage to port infrastructure caused by constant shelling, the physical volumes of maritime exports have fallen significantly.

Further evidence of the collapse in business activity is the fall in the business activity recovery index. According to estimates by the Institute for Economic Research and Policy Consulting (IER), this index has deteriorated significantly, falling to −0.11 in April (compared to 0 in February and March). This is the lowest reading of the index since March 2023.

It should be noted that, for 2025, industrial production fell by 2.4% year-on-year, compared with growth of 3.6% year-on-year in 2024. The aggregate industrial production index turned negative due to a sharp decline in the extractive sector: coal production fell by 31%, oil and gas by 8.4%, and metal ores by 7.1%.