Ukraine’s small businesses, services, housing market take a hit from quarantine

Since quarantine measures came into force on March 12 to prevent the spread of COVID-19, Ukraine has faced a decline in business activity, an increase in unemployment and losses of income for small and medium enterprises.

The losses are significant.

Almost a third (29%) of Ukrainian companies suspended their activity and 6% completely closed down, OpenDataBot, a site that monitors Ukrainian state registries, reported on April 6.

Ukrainian micro-enterprises have reported a 90-100% drop in income since the beginning of the quarantine. These businesses have had to dismiss up to 50% of their staff.

Owners of small and medium enterprises reported 25-50% losses as compared to the pre-quarantine period. They also reduced their number of workers by nearly 25%.

Large businesses lost up to 25% profits and are expected to dismiss nearly 25% of their staff.

The entertainment and transport industries were the hardest hit.

These enterprises have no sources of revenue during the quarantine, as the government canceled all mass gatherings, suspended fights, shuttered subways and banned buses in a bid to ward off the spread of COVID-19.

Service industry

During the quarantine, Ukraine’s foodservice industry has seen a five-fold decrease in income.

Out of nearly 50,000 cafes and restaurants open in 2019, approximately 30,000 places are currently not operating, OpenDataBot estimated.

During the second week of the quarantine, on April 23–29, restaurants saw a 73% drop in sales.

As many as 160,000 Ukrainians working in the restaurant business lost their jobs during the nationwide shutdown.

Housing market declines 

According to the Dobovo housing rental service, rental prices in Ukraine have fallen three-fold.

Nataliya Romanyuk, the CEO of Green Way Property in Kyiv, told the Kyiv Post on April 8 that, although the prices for commercial spaces are down, people are opting to rent houses outside of the city.

“In this case, we caught the balance. We stopped renting businesses, but we started to rent houses,” Romanyuk said.

Taxi services

Ukraine’s Bond taxi service, working in Kyiv in Odesa, lost 30% of its orders during the quarantine.

Prices have not changed significantly, but a 10% discount is automatically included in prices because of the low number of cars available, according to Bond’s CEO Petro Obukhov.

The judiciary 

As a result of the quarantine, nearly 5,000 court hearings were postponed indefinitely in Ukraine.

There is a legal option to conduct trials online, but Ukraine is not yet technically prepared for widespread remote hearings.

For now, the first online hearing will take place on April 13 in Dnipro, a city roughly 450 kilometers southeast of Kyiv. Ukrainian company Transform Energy will appeal a decision by Kyiv’s customs sevice using the Zoom video conferencing platform.

Fewer vacancies 

To stay afloat during the quarantine, Ukrainian businesses are opting to cut salaries and dismiss staff. 

According to Factum Group Ukraine, 20% of Ukrainians have been forced to take unpaid sick leave during the quarantine.

The number of job offers is also in decline.

Ukrainian job search website Work.ua reported that, during the first two weeks of quarantine, the number of job openings decreased by a factor of 1.8. Among vacancies recently published on the site, the decrease was even bigger: 2.5 times.

According to Ukrainian job aggregator Jooble, job search activity in Ukraine has plunged by 11.5%.

“People stop seeking jobs faster than companies dismiss employees and reduce workforce,” Jooble said.

As of April 7, Ukraine’s unemployment figures have soared by 13%, reaching a total of 364,000 jobless Ukrainians, according to Economy Minister Ihor Petrashko. 

His ministry expects that the unemployment rate will grow to 9.4% in 2020.

Source: www.kyivpost.com