Ukrainian businesses continued to show cautious optimism in October, even as missile attacks and power shortages challenged day-to-day operations. According to the National Bank of Ukraine’s monthly Business Activity Expectations Index (BAEI), companies remained positive about their performance outlook for the eighth consecutive month.
The BAEI stood at 50.3 points in October 2025, only slightly below 50.4 in September, but still above last year’s level of 49.4. An index above 50 indicates expectations of economic growth.
The upbeat sentiment was largely supported by international financial assistance, steady consumer demand, and government spending on infrastructure and road construction, as well as by slowing inflation and a stable exchange rate.
At the same time, the business climate was weighed down by the intensifying missile and drone attacks, damage to energy facilities and transport routes, power cuts, and rising costs for energy, labor, and reconstruction.
Trade and Construction Lead Growth
Trading companies remained the most optimistic sector for the second month in a row. The trade index rose to 54.3, up from 54.0 in September and 51.9 in October 2024. Businesses in retail and wholesale cited strong consumer demand and stable supplies from the new harvest. Many expected further growth in turnover and purchases, although they planned to continue reducing trade margins—albeit more slowly.
Construction companies also reported an improved outlook. With the help of budget spending on reconstruction and housing projects, the sector’s index rose to 53.3 in October, compared to 50.0 in September. Respondents expressed confidence about higher construction volumes and new orders, as well as greater demand for raw materials and contractor services.
Industry and Services Under Pressure
Industrial companies remained more cautious amid power shortages, rising costs, and ongoing damage to production sites. The sector’s index dipped slightly to 48.8 from 49.1 in September. Manufacturers expected fewer new orders and a decline in exports, though they stayed optimistic about production volumes overall.
The services sector faced similar challenges, including damaged rail infrastructure, complex logistics, and a shortage of skilled workers. The index for services fell to 48.7, from 49.4 in September, though it remained above last year’s level. While firms anticipated fewer new orders, many still expected stable demand for services already under way.
Prices and Employment Trends
Across most sectors, companies continued to signal plans to raise selling prices, despite expecting slower growth in supplier costs. Services companies, however, predicted faster growth in input prices, pushing them to increase their own rates.
The labor market showed mild improvement. Construction and trade businesses planned to expand their staff, while industrial and services firms still intended to cut jobs — with industry showing the strongest downsizing expectations.
Outlook
While the war continues to exert pressure on Ukraine’s economy, businesses remain resilient. The data suggest that government support, steady demand, and adaptive management are helping Ukrainian companies sustain operations — even amid an unpredictable wartime environment.
