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In Ukraine, industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities. In the mid-1980s, soviet Ukraine had an established, diversified, mature industrial sector covering some 20 major industries, including power generation, fuels, ferrous and non-ferrous extraction and processing, chemicals and petrochemicals, gas, machine-building, metalworking, forestry, woodworking, pulp & paper, building materials, light industry, and food processing.

By 1990, around 300 billion kW/h of energy, more than 100 million tonnes of iron ore were being mined, and some 40mn t of rolled steel stock and 6.5mn t of steel pipes were coming out of domestic steel mills. Ukraine was producing around 37,000 metal-cutting machine tools a year, and more than 100,000 tractors.

Ukraine has more than 10,000 state-owned and private enterprises, as well as hundreds of private and community-owned SMEs established over the last decade in various industries.

Mineral Resources of Ukraine

Ukraine has a large supply of many valuable mineral and raw material resources. Ukraine contains around 5% of the world’s mineral resources.Significant mineral resources in Ukraine include iron ore, coal, manganese, uranium ore, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, etc. As for stocks iron, manganese, titanium and uranium ore Ukraine is ranked first among European countries, with the mercury ore reserves - Secondly (after Spain).


Ukraine has large reserves of iron ore raw materials. These are mostly Precambrian metamorphic ores (haematite and black), as well as sedimentary (brown iron ore). Precambrian metamorphic ores are located on the Ukrainian crystalline shield.

Ukraine’s total reserves of iron ore are estimated at 27.4 billion tones (A+B+C1 category) and composed of rich (1.9 billion tones), as well as of poor ferriferous quartzes (24.1) and brown iron ores (1.4). 60 of the 83 iron ore deposits included in the estimate, are in the Kryvyi Rig basin, whose reserves equal 18.7 billion tonnes.

Coal is the main fossil fuel of Ukraine. It is mined in the Donetsk and Lviv-Volyn basins. Donetsk Basin (Donbass) is the largest in Ukraine. It is located on the territory of Donetsk and Lugansk oblasts in Eastern Ukraine.

Ukraine has some of the world's largestmanganese deposits, located in south central Ukraine at Nikopol' (Nykopil). Manganese ore types include carbonate, oxide – carbonate and oxide ores. Total manganese reserves in Ukraine are 3.5 billion tons including 2.3 billion tons of commercial reserves. Ukraine’s share in global manganese production is 32 per cent.

Titanium oreshave been explored in the area of the Ukrainian crystalline shield. One of the major deposits is the Irshansk deposit (Zhytomyr oblast). Operating there is a concentrator for ilmenite dressing. A titanium ore deposit in Dnipropetrovsk oblast (the Samotkan river basin) with virtually unlimited reserves, is of the most practical importance. Titanium is known to be used in building rockets, submarines, making artificial rubies, sapphires, synthetic rubber, etc.

Ukraine has raw materials for aluminum production: boxites (Vysokopillya deposit, Dnipropetrovsk oblast), alunites (Transcarpathia) and nefelines (Sea of Azov area).

Ukraine has modest recoverable resources of uranium – 225.000 tU according to IAEA Red Book 2011. Uranium mining began in 1948 at Pervomayskoye, and 65.000 tU have been produced so far. Current production is about 1.000 tU/yr (960 tU in 2012, 922 tU in 2013). VostgGOK expects increased production in 2014-2015.

Ukraine has deposits of ores of rare metals– zirconium, hafnium, niobium, lithium, beryllium, scandium, tantalum, yttrium, lanthanum, molybdenum, strontium. These metals and their alloys are used in nuclear engineering, electrical engineering, electronics, aerospace engineering. By reserves of some deposits belong to large and even giant. Currently in Ukraine producing large amounts of zirconium and germanium, a smaller - scandium and hafnium.

Ukraine’s iron and steel industries are very important segments of the economy. Its importance is because the machine building and metal-working industries depend on the production of ferrous and non-ferrous metals, and that metal is the main source of engineering materials and an important export article.

The metallurgy sector includes 14 integrated steel making plants, 7 pipe plants, 10 plants producing metallic articles, 16 merchant-coke plants, 17 refractory production plants, 3 ferroalloy plants, 20 non-ferrous metallurgical works, 35 factories reprocessing ferrous and non-ferrous scrap metal, and other enterprises.

Today, over 38,000 enterprises operate in the extraction and processing of metals and in the production of pipes and rolling stock. These include the world largest steel plants making cast iron, steel, rolled stock, steel bars and pipes in KryviyRih, Dnipropetrovsk, Zaporizhzhia, Mariupol, and other cities.

Oil and gas

There areoil and gas deposits but their reserves are not significant (the reserves of these fossil fuels were partly depleted during the Soviet period).

Ukraine has Europe's third-largest shale gas reserves at 1.2 trillion cubic meters (tcm). There are two potentially large shale gas fields. The Yuzivska gas field is located in Eastern Ukraine (Donetsk Oblast and Kharkiv Oblast); and the Oleska field in Western Ukraine (Lviv Oblast and in Ivano-Frankivsk Oblast).

Other raw materials

Ukraine has large reserves of such raw materials as potassium and magnesium salts, table salt, native zeolites, etc. Potassium salt is deposited in Lviv oblast and in Ivano-Frankivsk oblast (Precarpathian). Occurring here are mostly sulfate, mixed, sulfate chloride and chlorous salts. Sulfate salts (К2О content is 8-10 %) are the basic raw material to produce chlorine-free potash fertilizer which is in great demand. Ukraine has large and unique deposits of table salt. As to its chemical purity, this salt is the best in the World.

Ukraine is rich in building materials (granite, marble, labradorite, chalk, marl, sandstone, anhydrite, gypsum, celestine etc.). The largest reserves of granite and labradorite are found in Zhitomir oblast.

Ukrainian amber is coming from Northwest Ukraine, mostly from the region of Rivne. Ukrainian Succinit from Rivne is of the same origin as Baltic amber. These stones are approximately 40 – 54 million years old and therefore are from the Eocene age. Several insects found in Ukrainian amber are unique and could not be found on any other place in the World.

Heavy Industry

Much of Ukraine’s industry is concentrated in the Donetsk Basin, also called the Donbas, where there are rich deposits of coal and iron ore. In addition, the KryviyRih area is noted for its iron-ore mines, the Nikopol area for manganese ore, and the Zakarpattia region for petroleum, salt and natural gas deposits.

Machine-building is the largest Ukrainian industrial sector. It accounts for over one-third of the employed and about a quarter of the total cost of industrial main assets.It includes enterprises involved in metals, oil, chemical, mining, power generation, rolling, road construction and vehicles, farm machinery and equipment, equipment for the light and food industries, metal-cutting machine tools, and instrumentation.

The rapid development of machine-building proved Ukraine’s ability to develop and manufacture complicated science-intensive and highly technological machines and equipment. Among the examples are development of the rocket and space industry (Zenit 3SL, Cyclone), aircraft building (AN-70, AN-140, “Mria”), production of advanced tankers and large-tonnage vessles, fabrication of turbines for nuclear power plants, highly-efficient gas-pumping installations, equipment for high-voltage power transmission lines, mining equipment, diesel locomotives, tractors etc.

The Ukrainian shipbuilding industry is a complex of colleges, universities and research centers; experienced design bureaus; 9 shipbuilding yards with different capacities and specialisation; and a number of ship repair yards. Close geographical location to European Union, combined with availability of up-to-date design bureaus, powerful production facilities of shipyards, experienced labor force, presence of strong national metallurgic industry make the Ukrainian shipbuilding industry very attractive alternative to distant shipbuilding centers.

Chemical industry

Ukraine has a sizable industry devoted to chemical products and these constitute a major export commodity. The structure of the chemical sector includes two groups of enterprises – chemical and petrochemical ones. Within the structure of the industry, predominant are asset- and energy-intensive basic chemistry enterprises. This sector is represented by production of mineral fertilizers, sulfuric acid, coke products, synthetic fibers, caustic soda, and petrochemicals. The industrial plants are mainly in Kyiv, Korosten, Sumy and Fastiv.

The multi-branch chemical sector of Ukraine includes chemical, petrochemical and chemical-pharmaceutic sub-sectors with over 1,600 enterprises and structural units. The sector accounts for nearly 10% of industrial fixed assets and over 5% of all those employed by Ukrainian industrial sector.

The structure of the chemical sector includes two groups of enterprises – chemical and petrochemical ones. Within the structure of the industry, predominant are asset- and energy-intensive basic chemistry enterprises. This sector is represented by production of mineral fertilizers, non-organic acids and soda. Nitric fertilizers are manufactured in Donbass (Severodonetsk, Gorlovka) and Pridneprovie (Dneprodzerzhinsk). Rovno and Cherkassy enterprises use natural gas in their production. Phosphate fertilizers are manufactured in sugar-beet producing areas (Sumy, Vinnitsia) and in Odesa. Production of sulfuric acid is concentrated in the regions where it is consumed and in the centers of phosphate fertilizers production.

Energy sector

The energy sector is of key importance for the national economic development, as both production and municipal facilities require electric power for their operation. The energy sector peculiarity is that the technological equipment and primary generators of electric energy are separated from consumers. As a result, power generation, transmission and distribution have become separate industries.

Three types of generation facilities are operated in Ukraine, including thermal power plants (steam turbine and diesel types), hydroelectric plants (hydroelectric proper and hydroelectric accumulating plants) and nuclear power plants. The role of wind and helium power plants is growing.

Ukraine operates four nuclear power plants, including theZaporizhia, Pivdennoukrains’k, Rіvne and Khmelnytsky, and hydroelectric power generation cascades (6 large hydroelectric power stations on the Dnieper and 55 small stations on other rivers).

Ukraine ranks seventh in the world and fifth in Europe in terms of the number of nuclear reactors operated, total capacity and electricity produced. It has 15 reactors generating about half of its electricity.

Ukraine has high average wind speeds, a good solar radiation profile, plentiful biomass raw materials, and numerous dams on the Dnieper River, all ideally suited for renewable energy.

By 2013, the energy sector was producing a total of over 193.8bn kW/h. The electricity production decreased in 2013 compared to 2012 by 2.1 %. Nuclear power plants, whose share in the national production of electricity is about 43% for 2013 reduced electricity production compared to 2012 by 7.7 % - to 83.2 bn kW/h. Thermal power generation in 2013 has reduced by 1.3% - up to 95bn kW/h and hydropower has increased its output by 31.6 % - up to 14.4bn kW/h. A relatively new trend – alternative energy forms (wind and solar power) increased the electricity output by 91.2% - up to 1.2 bn kW/h.

The government in early September 2013 approved measures for allocation of an additional 4.298 billion UAH (excluding VAT) for the project to improve the nuclear power units safety in 2013-2017. This amount is partially coming from sale of electricity and thermal energy produced at the NAEC "Energoatom" facilities. Other sources of funding for the Ministry of Energy and Coal have to be agreed with the Ministry of Finance. The Cabinet of Ministers approved the indicative funding for the project (12.5 billion UAH) for the entire period of its operation in 2011-2017. The government also provided for an annual revisions of the amount that should help make project more efficient.

Transportation system

Overall, Ukraine has a well-developed and diverse transportation system. Ukrainian railroad network is extensive and links Ukrainian cities with industrial enterprises. Waterways such as Dnieper River and Black Sea and Azov Sea, and their port cities (Illichivsk, Mariupol, Mykolaiv, Odesa), play an important role in shipping.

Ukrainian highway system comprises about 147,000 kilometers (91,000 miles) of paved roads. Ukrainian subway systems exist in Kyiv, Dnepropetrovsk and Kharkiv. Buses small and large whisk passengers along all major city streets in all possible directions. The deepest in the world subway (metro) station is located in the Ukrainian capital, Kyiv. It is Arsenal’na metro station (red line) and its depth is 105 meters.

There are major international airports near Kyiv, Kharkiv, Dnipro, Lviv and Odesa cities.

Light industry

Light industryand consumer goods sectors of Ukraine are underdeveloped in comparison to its heavy industry and agriculture.

Food industry is traditionally the major supplier of basic foods, such as sugar, salt, oil, alcohol, confectionery, etc. Ukrainian food industry is the leader of the agro-industrial complex. It will remain strategically important in future, determining the well-being of the people. The sector has considerable production, research and labor potential. Among the major sub-sectors of the food industry are meat and dairy processing, sugar refining, flour milling and cereals production, oil extraction and starch and molasses production. The most significant centers of the food processing sector are Kyiv, Kharkiv, Odesa, Mykolaiv, Zaporizhzhia, and Lviv.

Agriculture of Ukraine

Historically, Ukraine is well known for its agricultural production. Ukraine has 60.300 hectares of land. Of this, 70% is agricultural land, 17% is used for forestry, the rest is for housing, industrial and other purposes (used as state reserves, for recreation etc). Ukraine’s agricultural sector employs 23.1 percent of the work force.

Ukraine's farms produce large amounts of potatoes and grains such as wheat, corn (maize), and barley. Potatoes, a food staple, are also grown for making starch and alcohol. Ukraine is one of the world's leading producers of sugar beets. Sunflowers are cultivated for their seed oil and latex. Other major crops include tomatoes, cabbages, squash, apples, and sour cherries. Beekeeping, silkworm raising, and fish farming also contribute to the country's economy. Large numbers of cattle are raised for meat and milk. Other livestock include poultry, pigs, sheep, and goats.

Fertile soil makes it possible to grow a variety of crops. Being a large grain producer, Ukraine is one of the six world largest exporters, supplying to 80 countries worldwide. The country is also the biggest exporter of sunflower oil and has substantial potential in growing and exporting rapeseed.

Only about 300 thousand hectares of agricultural lands in Ukraine (or 0.75% of the total agricultural land area) have been certified under the EU’s “Organic Farming” standards. Organic farming success stories in Ukraine are still only developing.

Current state of Ukrainian economy

The Ukrainian economy is recovering from the downturn caused by the trade blockade in eastern Ukraine in February. Following a decline in manufacturing output by 3.2 per cent year-on-year in February, in March manufacturing increased by 3.0% year-on-year. In March, Ukraine also experienced a growth rate of 11.5 per cent in construction output, compared to the same month in the previous year. Moreover, Ukraine retail trade turnover also performed well, having increased by 8.7% year-on-year, compared to 1.7 per cent year-on-year reduction in February 2017.

In addition, Ukraine freight and passenger turnover showed good results having risen by 4.2 per cent and 6.5 per cent respectively year-on-year in March 2017. Furthermore, the agricultural sector had positive results for the first time in the year, with a 0.8per cent year-on-year increase in an output, compared to 2.5 percent and 1per cent year-on-year reductions due to bad weather, in January and February 2017, respectively.  On the other hand, mining and quarrying continues to perform poorly, with a decline of 8.9 per cent year-on-year in March, compared to a decline of 11.5per cent year-on-year in February.
Within manufacturing, the following activities made the largest growth contribution in March when compared to the same period last year: furniture, with 15.8 percent increase; food products, with 12.0 percent increase; textile industry, with 8.8 percent increase; rubber, plastic and mineral products, with 8.5 percent increase; and machinery and equipment, with 2.2 percent increase.

On the other hand, all other industrial activities made negative contributions to industrial growth in March 2017: coke and petroleum products declined by 27.0per cent; electricity, gas, steam and air conditioning supply – by 13.8 per cent chemical  products – by 7.5 per cent; pharmaceutical products – by 6.4%; metallurgy– by 2.2 per cent; and wood products – by 0.8 per cent.

When talking about regions of Ukraine, most of them enjoyed positive rates of industrial growth in March 2017, with the highest growth rates in the following regions: Mykolayiv (33.8 per cent year-on-year); Zhytomyr (27.3 per cent year-on-year); Kirovohrad (20.7 per cent year-on-year); Vinnytsia (16.3 per cent year-on-year); Volyn (14.3 per cent year-on-year); Odesa (12.1 per cent year-on-year); Kharkiv (7.6 per cent year-on-year); Zaporizhzhya (7.2 per cent year-on-year); Ternopil (6.3 per cent year-on-year); Lviv (6.1 per cent year-on-year); Kyiv(5.9 per cent year-on-year); Zakarpattia (2.5 per cent year-on-year); and Poltava (0.9 per cent year-on-year).

Other regions, however, had negative growth rates in March: Luhansk (– 49.0 per cent year-on-year); Donetsk (– 21.8per cent year-on-year); Cherkasy (–11 per cent year-on-year); Chernihiv (– 8.2 per cent year-on-year); Rivne (– 7.8 per cent year-on-year); Dnipropetrovsk (–6.3 per cent year-on-year); City of Kyiv (–4.6 per cent year-on-year); Ivano-Frankivsk (–3.8 per cent year-on-year); Sumy (– 3.7 per cent year-on-year); Kherson (–2.9 per cent year-on-year); Chernivtsi (– 2.2 per cent year-on-year); and Khmelnytsky (– 1.2 per cent year-on-year).

Better economic performance led to reasonable increase in real and nominal average monthly wages, which were raised by 18 per cent year-on-year and 35.4 per cent year-on-year in March 2017.  Given rapid economic activities recovery after the downturn caused by the blockade in eastern Ukraine, Ukraine`s GDP growth of 2.5 per cent in 2017 is expected.