Personnel Shortage Has Become the Main Threat to the Economy: Worker Deficit Comes to the Forefront

The mood of Ukrainian business at the beginning of 2026 has noticeably improved. Entrepreneurs have become more optimistic about the prospects of their activities, production, and investments, which was reflected in the increase of the Business Expectations Index to 105.8%. For comparison, in the previous quarter this figure was 102.1%. At the same time, for the first time in a long period, the balance of expectations regarding the increase in production volumes moved into positive territory, reaching +0.6%.

However, the overall improvement does not mean that the situation is the same across the country. While the western regions demonstrate confident growth and attract new enterprises, the frontline regions continue to operate under security risks, worker shortages, and a difficult economic situation.

This is evidenced by the results of the regulator's survey on business expectations of enterprises for Q1 2026, analyzed by the parliamentary Committee on Finance, Tax and Customs Policy.

Western regions became leaders in production growth expectations

According to the study, significant differences in business sentiment are observed depending on the region. The assessment was carried out using the war-economic zoning methodology developed by the Kyiv School of Economics and the Ministry of Economy.

The best indicators are shown by the regions of the western border rear, which have effectively become centers for the relocation of enterprises from frontline territories and hubs for the formation of new logistics routes. It is here that the highest expectations for production growth were recorded. In particular, in Volyn region this figure is +76.9%, in Zakarpattia — +69.2%, and in Lviv — +61.5%.

Where business assessments of the economic situation worsened

In the internal rear regions, the situation is more heterogeneous and largely depends on the structure of the local economy and access to sales markets. The greatest deterioration in business expectations was recorded in Cherkasy region, where the indicator is -50.0%, as well as in Poltava region — -8.5%. At the same time, positive dynamics are shown by Khmelnytskyi region (+26.8%) and Ternopil region (+28.6%).

Frontline regions continue to invest despite risks

The most difficult conditions for doing business remain in frontline and border regions. For example, in Zaporizhzhia region, expectations regarding product sales remain negative at -5.6%, and in Sumy region the production expectations balance reaches -17.3%.

Despite the difficult security situation, enterprises in these regions continue to invest in fixed assets and equipment. In Zaporizhzhia region, the balance of such expectations is +33.3%, in Chernihiv — +15.4%. At the same time, it is emphasized that these investments are mainly aimed not at expanding production but at adapting business to wartime conditions, including the purchase of generators, relocation of production capacities within the region, and security measures.

Which regions need workers the most

Signs of improvement are also observed in the labor market. The nationwide employment expectations balance improved to -1.8% compared to -3.8% in the previous quarter. However, a significant gap remains between regions.

The highest demand for workers is recorded in Lviv region (+22.0%), Chernivtsi region (+18.2%), Volyn region (+15.4%), and Kyiv. Conversely, the worst employment situation is observed in Sumy (-50.0%), Chernihiv (-46.2%), and Zaporizhzhia (-42.1%) regions.

Personnel shortage remains the main challenge for the economy

The parliamentary committee emphasizes that economic policy must take into account significant regional differences. While for western regions the priority is scaling business, developing infrastructure, and supporting exports, for frontline territories the key task remains maintaining the basic capacity of enterprises to operate under constant risks.

At the same time, the biggest long-term problem is called the shortage of labor. Experts believe that this issue cannot be solved solely by financial instruments. Without the return of the population, development of retraining programs, and creation of incentives to retain personnel, frontline regions risk remaining in survival mode for a long time, which may complicate their post-war recovery.

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