Labour productivity in Ukraine: trends, challenges and skills

Labour productivity in Ukraine declined significantly (to 80% of the 2021 level) during the first year of full-scale russia’s war against Ukraine, due to supply chain disruptions, destroyed production capacity, and migration caused by the invasion. Since then, productivity has been gradually recovering (to 85% in 2025 of the 2021 level).

Productivity growth is boosted by a well-educated labour force, advanced technology, sustained infrastructure, strong capacity for innovation, and robust investment. Proper education, reskilling, and upskilling will enhance labour productivity by meeting labour-market needs.

EU accession will increase productivity through technology transfer and compliance with EU standards and will also attract investment through access to European cohesion funds and private capital inflows.

Productivity growth is crucial for Ukrainian companies, especially given labour shortages caused by the full-scale war, with 5.6 million war refugees in 2026 and an estimated annual loss of at least 5,5% of pre-war GDP.

SME growth still relies heavily on hiring, yet productivity tools are already widespread: 21% used automation, 30% used digitalisation, and 34% used staff training during the last 12 months. These tools often complement one another. Firms without prior experience of automation, digitalisation or training often remain outside the process.

Company size and sector strongly shape both the adoption of and plans for automation, digitalisation and training.

Automation and digitalisation face significant investment barriers, while companies that automate mostly finance these investments from their own funds.

War-related risks are another major barrier. Many businesses also do not see a clear need to change, possibly because they are not fully aware of available solutions.