Lviv entrepreneurs are not afraid of increased competition from the relocated businesses

07/ 10/ 2022

As in other regions, there is a deterioration in business sentiment in Lviv, but it is insignificant compared to the rest of Ukraine. This is indicated by the results of the survey of the European Business Association, which has been conducted among regional companies for the third year in a row. Thus, Lviv entrepreneurs rated the conditions of doing business at 2.52 points out of 5 possible compared to last years 2.95 points. At the same time, as last year, this result is the highest among all regions. More than half of the respondents, namely 56%, claim that the conditions for doing business in the region are satisfactory, while 41% say that it is difficult for them to do business, and only 3% believe that it is easy. Last year, 24% rated business conditions as favorable, that is, the share of such entrepreneurs decreased 8 times over the year. According to 47% of entrepreneurs, the conditions for doing business in the region have worsened over the past six months, and 19% even claim a significant deterioration. At the same time, 22% did not feel any changes, and 13% believe that conditions have improved. The five issues that most concern businesses include logistical difficulties, reduced purchasing power, the complexity of the procedure for booking employees from mobilization, bureaucracy, and the outflow of personnel abroad. The vast majority, namely 72%, do not see the need for office or production relocation, and 9% do not have the opportunity to relocate. Also, 9% of companies moved abroad. The majority of entrepreneurs in the western region, namely 78%, do not feel increased competition in the region due to the relocation of companies from other regions of Ukraine, although 19% admitted that they feel competition. Every fifth entrepreneur in the region lost more than 50% of their business income during martial law, every third estimated their losses at 21-50%. Moreover, 16% of companies lost up to 10% of their income, and the same share of companies experienced losses from 11% to 20%. Also, 16% of entrepreneurs survived without losses, and 6% were even able to make a profit from their own businesses. Only 13% have assets located in temporarily occupied territories. Besides, as part of the survey, Lviv entrepreneurs evaluated their experience of interaction with regional state authorities. It turned out that businesses rated the work of local courts, recruitment, and social support centers the worst, while businesses rated the work of the military administration, regional customs, city council, tax service, and the National Police as satisfactory. One in four plans to maintain the companys activities under martial law by the end of the year. Among other plans are the digitization of business processes (16%), reduction of expenses (13%), entry into new markets (12%), optimization of the companys staff (12%), expansion, and new investments (12%). Business believes that for the post-war recovery of the region, it is necessary to concentrate on the development of domestic production, support of small and medium-sized businesses, rebooting of government institutions, maintenance of existing and creation of new jobs, and construction of road and railway infrastructure. The survey was conducted among the member companies of the EBA Western Ukrainian Office from August 15 to September 21, 2022. The general news is available at the link.

More than half of the respondents, namely 56%, claim that the conditions for doing business in the region are satisfactory, while 41% say that it is difficult for them to do business, and only 3% believe that it is easy. Last year, 24% rated business conditions as favorable, that is, the share of such entrepreneurs decreased 8 times over the year.

According to 47% of entrepreneurs, the conditions for doing business in the region have worsened over the past six months, and 19% even claim a significant deterioration. At the same time, 22% did not feel any changes, and 13% believe that conditions have improved. The five issues that most concern businesses include logistical difficulties, reduced purchasing power, the complexity of the procedure for booking employees from mobilization, bureaucracy, and the outflow of personnel abroad.

The vast majority, namely 72%, do not see the need for office or production relocation, and 9% do not have the opportunity to relocate. Also, 9% of companies moved abroad. The majority of entrepreneurs in the western region, namely 78%, do not feel increased competition in the region due to the relocation of companies from other regions of Ukraine, although 19% admitted that they feel competition.

Every fifth entrepreneur in the region lost more than 50% of their business income during martial law, every third estimated their losses at 21-50%. Moreover, 16% of companies lost up to 10% of their income, and the same share of companies experienced losses from 11% to 20%. Also, 16% of entrepreneurs survived without losses, and 6% were even able to make a profit from their own businesses. Only 13% have assets located in temporarily occupied territories.

Besides, as part of the survey, Lviv entrepreneurs evaluated their experience of interaction with regional state authorities. It turned out that businesses rated the work of local courts, recruitment, and social support centers the worst, while businesses rated the work of the military administration, regional customs, city council, tax service, and the National Police as satisfactory.

One in four plans to maintain the company’s activities under martial law by the end of the year. Among other plans are the digitization of business processes (16%), reduction of expenses (13%), entry into new markets (12%), optimization of the company’s staff (12%), expansion, and new investments (12%).

Business believes that for the post-war recovery of the region, it is necessary to concentrate on the development of domestic production, support of small and medium-sized businesses, rebooting of government institutions, maintenance of existing and creation of new jobs, and construction of road and railway infrastructure.

The survey was conducted among the member companies of the EBA Western Ukrainian Office from August 15 to September 21, 2022. The general news is available at the link.