In Ukraine, farmers and law firms most often close their businesses: what was the reason

Since the beginning of the full-scale invasion, the liquidation of companies in the Ukrainian legal sector has increased by 2.4 points to 4.7%, with a large share of closures in large law firms. In agriculture, the share of liquidations increased by 1.4 points. The highest levels of business closures were recorded in Kiev and the region, Dnepropetrovsk, Lviv, as well as Odessa, Zaporozhye and Kiev regions. Writes UNN with reference to youcontrol.Market

Since the beginning of the full-scale invasion, the frequency of closures of legal services companies has increased by +2.4 percentage points.

If among the 100 randomly selected Ukrainian bankrupt companies in 2021 there were only 2.3 law firms, then among all liquidated businesses during the full-scale war, the legal sector already accounts for as much as 4.7%. This trend may indicate an increase in concentration in this rather fragmented industry: in war conditions, large law firms have a better chance of survival

Second on the list, where the level of company closures increased during the war, was agriculture. The sector's share in the liquidation of enterprises increased by 1.4 percentage points.

Industries with negative dynamics also include real estate transactions, medical institutions, and financial services.

In more than two years of a full-scale war, there has been a decline in the number of liquidations among companies in the following industries::

• water supply;
• woodworking;
  
• retail and wholesale trade;
  
• construction.
  

The reasons for the decline in the share of these industries in the closure of enterprises should be sought in industry specifics. The sphere of Water Supply, construction, and public catering, as well as large retail chains, belong to critical infrastructure, the need for the functioning of which is gaining new weight in wartime. In addition, the role of the construction sector for restoration and reconstruction cannot be ignored

According to him, the introduced monetary support contributed to an increase in turnover in the wholesale and retail trade sectors. All these factors together had a positive impact on reducing bankruptcy in these sectors of the economy.

Most of all, businesses were closed in such regions as:

1. Kiev and the region;
2. Dnipropetrovsk region;
   
3. Lviv;
   

Analyzing the dynamics of the closure of companies during the war, it can be noted that the Odessa, Zaporozhye and Kiev regions turned out to be the regions where the number of liquidations of enterprises increased the most. In particular, the share of the Odessa region in the total number of closed companies during the war increased by 1.6 percentage points, from 7.4% to 9%.

This indicates a deterioration in the conditions for doing business in the Odessa region during the war. Also, the increase in liquidations could be affected by the relocation of companies from the eastern regions. After the relocation, especially in the Odessa region, which is one of the leaders in the number of re-registrations, not all companies were able to successfully continue their activities.

In Zaporizhia region, the share of business closures increased by 1 percentage point, in Kyiv region — by 0.6 percentage points, in Cherkasy region — by 0.5 percentage points, and in Poltava region — by 0.3 percentage points.

In terms of the growth rate of the region's share in the official termination of the activities of Ukrainian companies during a full-scale war, compared to 2021, the leaders were Odessa, Zaporozhye and Kiev regions. The growth of the share of these regions in the liquidation of businesses was partially influenced not only by the deterioration of the business climate as a result of military operations, but also by the tendency to relocate financially weakened companies from neighboring occupied communities to the territories of these regions controlled by Ukraine

According to him, a significant drop in the share of business closures occurred in such regions as Kherson, Kharkiv and Donetsk, and this trend is a consequence of the occupation of some of these regions, and not an improvement in business conditions. A decrease in the number of enterprises operating in the legal field of these regions leads to a proportional decrease in the number of bankruptcies and suspensions compared to the period before the occupation.

Recall

The government is ready to provide sunflower seeds free of charge to farmers from the frontline and affected territories who previously applied for corn seeds, but there were not enough reserves for them. It is expected that this will allow them to process from 5 to 500 hectares in several regions and potentially receive about 360 million hryvnias of income.