Ukrainian heavy industry suffered significant losses due to the war, but continues to work and play a key role in the country’s economy and defense. However, despite the decline in production and loss of assets, the industry demonstrates the ability to adapt and remains the basis for future recovery. This is stated in a new study on Liga.Net, reports “DS“. The PromPolitInform portal reports.
Before the full-scale invasion, the industrial sector formed 24.8% of Ukraine’s GDP (about $200 billion), and heavy industry sectors provided over $40 billion in foreign exchange earnings and a significant part of exports. In particular, metallurgy generated up to 10.3% of GDP, taking into account indirect effects, and brought in $22.2 billion in export earnings.
After the war, the situation worsened: in the first half of 2022, the economy shrank by almost 30%, and industry by 37%. Ukraine lost 30–40% of its steelmaking capacity, in particular due to the destruction of enterprises in Mariupol. The share of industry in GDP decreased to 19% as of 2024.
The industry is currently facing a number of systemic challenges. Among them are losses of assets of $14.4–17.5 billion, a 20–30% shortage of the workforce, a 50% increase in logistics costs, and a 40% loss of energy capacity. An additional pressure factor is the introduction of the CBAM environmental mechanism in the EU, which could cost Ukrainian metallurgy up to $1.4 billion in exports.
Despite these difficulties, in 2025 the economy is showing signs of recovery: GDP grew by 1.8–2.2%, and one of the drivers was industry and construction. The share of mechanical engineering is also growing – up to 9.1% in the structure of product sales. In addition, heavy industry provides a significant share of the Ukrainian military-industrial complex through the supply of raw materials, materials and components.
Experts emphasize: heavy industry remains a key element of the country’s reconstruction. The total needs for reconstruction are estimated at $524 billion, and it is the industry that must provide construction materials, equipment and infrastructure solutions.
“Every hryvnia invested in the development of mechanical engineering or metalworking launches a long production chain throughout the country,” said People’s Deputy Dmytro Kysylevsky.
The government also emphasizes the importance of industrial policy: according to Prime Minister Yulia Svyrydenko, the priority is to create conditions for the development of production with high added value and integration with European markets.
As is known, metallurgy remains one of the key donors to the Ukrainian budget: the largest companies in the industry have paid almost UAH 200 billion in taxes over the past 5 years. The decline in the industry is a direct loss of foreign exchange earnings and budget revenues.
