Machine Building Industries

Machine building is an important part of the Ukrainian economy. Many core engineering skills were converted to civilian machine building, and Ukraine managed to achieve conversion and retain some production. Those companies that became champions in the industry were forced to innovate, while for many the digitalization could be a useful way to become competitive.

Ukraine’s machine-building: huge potential for growth

Ukraine has significant reserves of raw materials which together with a developed metallurgy industry can satisfy large production needs. Most machine-building enterprises are located in the East of Ukraine, which is within a short distance from raw materials supply base, mainly steel.
Ukraine is well supplied with an educated labor force as domestic universities and colleges graduate c. 10,000 students from machine-building faculties annually.
Availability of developed transport infrastructure makes easy access to large export markets of Europe, Asia and the Middle East.

There are 13 main segments of mechanical engineering of Ukraine, which form 90% of added value in mechanical engineering:

Air and space aircraft, related equipment
General-purpose machines and equipment
Other special purpose vehicles
Units, details, and accessories for vehicles
Electric motors, generators, transformers, electrical equipment
Other general-purpose machinery
Railway rolling stock
Machinery and equipment for agriculture
Military vehicles
Wires, cables, and wiring devices
Tools and equipment for measurement, research
Home appliances
Other electrical equipment

All of these segments need automation to raise its competitiveness, cut expenses, improve flexibility and speed of reaction to changes in customer demand, however, the specifics might differ from segment to segment.

Major highlights

6,682

business entities operating in mechanical engineering. This is 5.4% of the total number of business entities in all industries.

2/3

of the business entities operating in mechanical engineering are enterprises, In 2017 there were 4481 enterprises. This is 10.7% of the total number of enterprises in all industries and 1.3% of the total number of enterprises in the economy.

363 100

people were employed in mechanical engineering. This is 15.6% of the total number of employees in industry and 4.4% of the total number in the economy. The development of this sector is very important for GDP growth and overall country stability.

4.4 billion
US dollars

Volume of Ukraine’s exports of industrial machinery in 2019. Still, Ukraine’s production and export potential remains rather significant with much room for future growth.

13.3 billion
US dollars

Volume of Ukraine’s imports of industrial machinery in 2019. This is 22% of Ukraine’s total imports, which shows strong domestic demand for quality industrial machinery.

There are 13 main segments of machine building (mechanical engineering) of Ukraine, which form 90% of added value in mechanical engineering:

Air and space aircraft

General-purpose machines and equipment

Electric motors, generators, transformers, electrical equipment

Machinery and equipment for agriculture

Current state

Unfortunately, the COVID-19 pandemic had a heavy toll on the machine building sector, which declined, according to official statistics, by 18.5% year-on-year in 2020. Luckily in 2021, post-COVID-19 economic recovery led to the reverse of the decline, with selective segments of the machine building sector heading for growth. In January-March 2021, the machine building industry slowed the decline to 1.6% year-on-year, and the production of equipment increased by 6.4%, while the output of non-automotive transportation goods increased 3.5%.

What is the Future of the Industry?

Ukrainian Machine Building Industry has a huge potential in development. Many actions have been done and more are coming. One of the major highlights of 2020, is the creation of the movement ClusteRISE by Association of Industrial Automation of Ukraine. Thanks to it, regional elites can create a powerful movement for real economic transformation of their regions.