Almost half of the EBA companies have resumed full operation
Currently, 47% of companies work in full (last month it was 28%), while 50% work partially or with certain restrictions. The latter includes 37% of companies that limited the geography of activities, 17% that switched to online, and 16% that closed a part of offices, outlets, or branches. These are the results of a survey conducted by the European Business Association to identify the business sentiments after 100 days of the war in Ukraine.
Among the companies that previously suspended their work, 17% of them have already resumed it either in full or in part. Now only 3% of companies don’t work – these were 4% in April and 29% in March.
The number of companies that pay full salaries to their employees has increased slightly to 63%. Moreover, 25% make additional or advance payments. Meanwhile, 13% were forced to cut their monetary remuneration, and 9% – to refuse or reduce bonuses. Also, 4% of companies are forced to send staff on unpaid leave, while the number of companies resorting to layoffs has increased slightly to 8% (last month it was 3%).
Businesses continue to allocate resources to support the army and humanitarian efforts in almost the same amounts as they did in the first days of the full-scale war. Besides, 47% of companies continue to supply products and support their employees who have joined the ranks of the Armed Forces of Ukraine or the territorial defense forces. Another 44% help Ukraine with finances, 25% with services, and 18% with medicine or protective/defense equipment. Only 8% of companies report that they have already exhausted their resources to help (against 5% a month ago).
There were virtually no changes in the assessment of the available financial reserves by businesses. One-third of companies (34%) estimate that their financial resilience is sufficient for 6 months, 20% – for a few months, 20% – for a year, and another 19% have financial reserves enough to last for a period longer than a year.
Meanwhile, 5% have already exhausted their financial reserves, while last month it was 3% of businesses. In financial matters, companies rely mainly on their own resources. Thus, 92% of companies did not use state or international funds to support their business.
Businesses also continue to report losses, which, unfortunately, are increasing every month because of warfare. For example, 100 days of the active phase of the war caused losses of up to $1 million for 48% of businesses, another 37% suffered losses ranging from $1 million to $10 million, and 12% reported losses of more than $10 million. Only 2% of businesses suffered no losses. Meanwhile, 42% of the EBA companies report losses of property or other assets as a direct result of hostilities.
Although in the current situation it is extremely difficult to make forecasts, 70% of CEOs expect negative dynamics in their business until the end of 2022, the remaining 15% believe that their business situation will remain unchanged, and 11% hope for the growth of business indicators. It should be reminded that last year 83% of CEOs predicted growth for their business in 2022, and only 2% expected deterioration. Thus, the war has made unfortunate adjustments to the plans of about two-thirds of the EBA companies.
Most companies are not planning significant changes in their staff size or salaries this year as reported by 48% and 58% respectively. Meanwhile, 45% of companies may resort to layoffs and 15% may reduce the remuneration. Although there are positive trends for some businesses, 6% plan to hire new people this year, and 23% plan to increase gradually staff salaries.
The survey was conducted from May 26 to June 2, 2022. Altogether, 101 CEOs of the EBA member companies took part in the survey.