Connexion
Reconstruction holds Ukraine’s economy above water as service sector cracks
Ukraine’s wartime business optimism has split in two. In July, the construction sector, funded by state money for roads and damaged infrastructure, remained the country’s most confident, even as service firms slid into outright pessimism, and overall confidence in the economy stopped improving.
The divide is about money. Rebuilding, paid for by the government and its foreign backers, is thriving. The businesses that earn their own keep—transport, hospitality, professional and financial firms—are squeezed by rising costs and a shortage of skilled workers.
Only builders expect to hire; industry and services plan to cut.
Each month, the National Bank of Ukraine asks companies whether they expect business to improve or worsen. In July, there was only barely more expected improvement than decline: a reading of 50.1, where 50 is the dividing line, down from 50.4 in June.
A year earlier, more firms were gloomy than hopeful. As 2025 closed, the divide ran along a different line: retail firms stayed confident while industry shrank under Russian strikes, and the overall mood was still a shade negative.
Ukraine’s economy adapts to war, but hits a ceiling money can’t break (INFOGRAPHICS)
Where the rebuilding money goes, confidence follows
Construction was far above the line, at 54.2, lifted by financing for road repair and rebuilding—even as the same survey listed intensifying strikes on critical infrastructure among the factors holding activity back.
Industry and trade stayed barely positive. Services alone fell below the line, into pessimism, squeezed by higher costs and too few skilled workers. Only builders expect to hire; industry and services plan to cut.
For Ukraine’s partners, the survey shows where rebuilding money actually reaches. That spending—part-funded by Western aid, which the bank lists as one reason confidence holds up at all—is a preview of the demand that a full postwar rebuild would bring.
In June 2026, Russian strikes on that same industrial base pushed Ukraine into its sharpest wartime contraction since 2023.
The next survey, covering August, is due on the first working day of September.
