TRANSFORMATIONAL CHANGES IN UKRAINE’S MACHINE-BUILDING SECTOR UNDER THE INFLUENCE OF MILITARY ACTIONS

Abstract

The article is dedicated the evolution and transformational changes in Ukraine's machine-building sector under the influence of military actions that began in 2014 and intensified with the full-scale invasion in 2022. The state of the machine-building industry before 2014 is analyzed, when the sector was one of the most important in the country's economy, contributing 10% to GDP and 12% to exports. During this period, machine-building included the production of transportation equipment, aerospace industry, agricultural machinery, and energy equipment. Key enterprises like "Kryukiv Railway Car Building Works," "Antonov," and "Motor Sich" played crucial roles in both domestic and international markets. The events of 2014-2021, related to the war in eastern Ukraine, led to significant economic losses. Some enterprises were located in temporarily occupied territories, and Russian sanctions drastically reduced export volumes. Production decreased by 21% compared to 2013, and exports to Russia dropped by over 70%. Despite these challenges, the industry gradually began reorienting to new markets in the EU, Asia, and the Middle East, which partially compensated for the losses. The full-scale Russian invasion in 2022 dealt an even more devastating blow to Ukraine's machine-building sector. As a result of the hostilities, over 30% of enterprises were destroyed or damaged, and production volumes decreased by more than 40% compared to 2021. However, even under such conditions, Ukraine's machine-building sector retains the potential for recovery and development. The conducted research is actualizing the importance of state support and international assistance for restoring destroyed production facilities, modernizing equipment, and expanding markets, particularly through the development of the defense industry and cooperation with foreign partners. The article discusses the prospects for the development of Ukraine's machine-building industry in the coming years, including investments in the defense industry, the introduction of modern technologies, strengthening cooperation with international companies, and integration into global production chains. Special attention is given to the issues of production environmentalization and sustainable development of the sector, in line with global trends. Despite significant challenges, Ukraine's machine-building sector demonstrates the ability to adapt and recover, and it has the potential for sustainable development, provided there is support from the state and international partners.