Three years of full-scale war have radically changed not only social life but also the economic structure of Ukraine. Industries that used to be the country's flagship exports and industrial backbone have suffered devastating losses, while others have shown unexpected resilience. Let's take a look at how the country's economic landscape has changed and what it means for the recovery ahead.

Industrial production: loss of a third of potential

Ukraine's industrial sector has been hit hard since the first days of the invasion. A 36.7% drop in 2022 was only partially offset by growth of 6.8% in 2023 and 3.6% in 2024. The industrial production index at the beginning of 2025 is only about 70% of its pre-war level.

The changing role of industry in the country's economy is particularly telling. Its share in GDP fell from 18% in early 2022 to 12% in early 2025. The drop in production activity is also evidenced by a sharp decline in industrial gas consumption - from 10 billion cubic metres before the war to around 4 billion cubic metres now.

Metallurgy is under threat

The steel industry, which has been Ukraine's export engine for decades, has lost two-thirds of its production capacity. Before the war, Ukraine produced about 21 million tonnes of steel annually, and in 2022-2023, this figure fell to 6.5 million tonnes.

Despite a certain recovery in early 2025 (up 12% in January compared to December, to 611 thousand tonnes), the industry is facing new challenges. A critical issue is the lack of raw materials. Over the past decade, coking coal production in Ukraine has fallen by 74% and coke production by almost 85%.

A particular risk to the industry is the possible shutdown of Pokrovske Mine Administration, which had a 66% share of the coking coal market in 2024. This could lead to a further halving of steel production to 3.5 million tonnes, which would threaten the very existence of the Ukrainian steel industry as a global player.

Chemical industry: import dependence is growing

The situation in the chemicals industry is no less dramatic. A 62% drop in 2022 was partially offset by a 15.5% recovery in 2023 and another 3.9% in the first half of 2024. However, these figures do not reflect the full depth of the crisis.

No more than 10-15% of large and medium-sized enterprises, which account for almost 80% of chemical production, are currently operating at full capacity. Out of the 4,000 companies operating at the beginning of 2022, many have ceased to exist, and the industry has lost about $5-6 billion.

The most alarming consequence is the critical increase in import dependence - now 78% of chemical products consumed by Ukraine are imported.

Machine building: adaptation to military needs

The machine building industry, after falling by 43.1% in 2022 and recovering by 16.7% in 2023, is again showing negative dynamics - minus 0.9% in the first half of 2024. Problems with access to electricity, especially for energy-intensive industries, remain the main constraint.

At the same time, military orders stimulated certain sub-sectors. This applies to the production of railway locomotives and rolling stock (up 13.7%) and military vehicles (up 7.9%). Here we see a partial adaptation to the military environment and a reorientation towards defence needs.

Losses in the energy sector

The energy sector has suffered a huge blow. Total losses in Ukraine's energy sector are estimated at $92.8 billion. The electricity sector suffered the most - $58.2 billion in losses.

The scale of destruction is impressive: more than 18 GW of power generating capacity is under occupation, and another 10 GW was lost as a result of shelling. As a result, total electricity generation has more than halved from 55 to 20 GW.

Kakhovka and Dniprovska hydroelectric power plants, Zmiivska and Trypilska thermal power plants were completely destroyed. Many private thermal power plants, including Ladyzhyn, Burshtyn, Dobrotvir, Kurakhiv, Kryvyi Rih, and Prydniprovia TPPs, sustained critical damage (over 80%).

In the oil and gas sector, Russian troops have virtually destroyed all oil refineries and a significant portion of the oil and oil product storage infrastructure.

Damage to infrastructure

Direct damage to infrastructure is estimated at $176 billion, and the total reconstruction needs over a ten-year period are $524 billion. Priority reconstruction projects alone will require $17.32 billion in 2025, of which only $7.4 billion is funded.

Around 30% of the railway infrastructure is in a constant cycle of damage and repair. Water supply and sanitation are in critical condition - 8.5 million people need access to basic services. More than 12% of households have lost access to mobile communications.

The agricultural sector as an ‘island’ of stability

Amid the devastation in other industries, the agricultural sector has shown remarkable resilience. Before the war, in 2021, agricultural exports accounted for 41% ($27.7 billion) of the country's total exports. In 2022, the share of agricultural exports increased to 53% ($23.6 billion). And in 2024, this figure reached 60% ($24.8 billion).

These figures illustrate not only the resilience of agribusiness, but also the critical decline of other export industries, primarily metallurgy and machine building. Today, the agricultural sector provides 5 million jobs and generates 20% of GDP.

However, even this relatively stable sector faces serious challenges - about 20% of agricultural land is under occupation or severely damaged, and more than 5 million hectares of Ukrainian land are mined.

A worrying signal is that in January 2025, exports of grains and oilseeds fell by 8% to 3.8 million tonnes, hitting a 15-month low.

IT sector: ups and downs

The IT industry, which has traditionally been considered crisis-resistant, has shown mixed dynamics. In the first year of the full-scale war, exports of IT services reached a record $7.3 billion (plus 5.8% by 2021). However, in 2023, Ukraine's IT exports stopped growing for the first time in history, dropping by 8.5% to $6.7 billion. In 2024, the trend continued with a further 4.2% decline to $6.45 billion.

The main reasons for the decline were the slowdown in the global economy, power outages, the risk of mobilising specialists and the reluctance of foreign companies to enter into new contracts. More than half of Ukrainian IT companies have faced contract cancellations, and a quarter report a loss of more than 40% of their revenue.

Despite these challenges, the IT sector remains the largest exporter of services in Ukraine, with a share of 37.4% in total service exports and 11.5% in the overall export structure.

Labour market trends

The NBU estimates that Ukraine has lost about a quarter of its workforce since the start of the full-scale invasion. Nevertheless, the labour market is showing signs of recovery. As of February 2025, it had recovered by more than 90% compared to February 2022, with 98,736 vacancies posted by employers (4% more than in January).

The structure of demand has also changed, with almost half (44%) of all vacancies falling into five categories: blue-collar occupations and production; service sector; sales and purchasing; retail; and logistics, warehousing and foreign trade. Since the beginning of 2025, an acute shortage of specialists has been observed in land transport, manufacturing, and preschool education.

Conclusions: a new economic portrait of Ukraine

Three years of war have changed Ukraine's economic profile. The country, which used to have a strong industrial, especially metallurgical, potential, is being transformed into a country dominated by agricultural exports and critically dependent on imports of industrial products.

These structural changes pose both risks and opportunities. On the one hand, the loss of industrial capacity and critical infrastructure threatens economic sovereignty and limits growth prospects after the war. On the other hand, it opens a window of opportunity to modernise the economy on a new technological basis.

The biggest challenge is to transform the forced structural changes in favour of long-term development with higher value-added exports and lower energy intensity of production. This requires a prudent government policy focused on economic diversification, restoring energy independence and developing human capital.

Ultimately, it is how effectively we take advantage of this moment of structural adjustment that will determine whether the war will become not only a tragedy but also a starting point for creating a competitive economy in the 21st century.