Construction Materials Market in Ukraine: Demand, Supply and Access

The fifth Rapid Damage and Needs Assessment, RDNA5, was published in February 2026 by the Government of Ukraine, the World Bank Group, the European Commission and the United Nations. It estimates Ukraine's recovery and reconstruction needs for 2026–2035 at US$587.7bn. Construction work performed in Ukraine in 2025 was valued at UAH 258.2bn, roughly US$6bn at average 2025 exchange rates. Spread evenly over the decade, the assessed needs would amount to almost ten times the value of all construction work carried out in 2025.

The two figures measure different quantities. The needs estimate is the cost of restoring damaged assets to an improved standard and includes items unrelated to construction. Construction output records work actually performed. Whether assessed need becomes demand in the construction materials market in Ukraine depends on several factors: funding, security conditions in the affected areas, project preparation and procurement, and the capacity of the construction sector. Each of these can be traced in official and industry data for 2021 to 2026.

Since 2022, Ukrainian statistics have excluded temporarily occupied territory and areas of active hostilities. Comparisons with 2021 therefore reflect changes in statistical coverage as well as changes in activity.

Reconstruction needs, funding and executed work

The RDNA5 main report defines needs as the cost of repair, restoration and reconstruction at market prices at the end of 2025. The estimate includes a premium for rebuilding to improved standards and allowances for inflation, surge pricing and higher insurance costs. It has risen with each edition of the assessment, from US$349bn in the first assessment in 2022 to US$587.7bn. The report attributes the latest increase to continued damage, improved data, methodological refinements, inflation and exchange-rate movements. Transport accounts for the largest share at US$96.3bn, followed by energy at US$90.6bn and housing at US$89.8bn.

A substantial part of the total does not relate to construction. Social protection needs of US$42.7bn consist mainly of benefit payments and employment measures. Explosive hazard management accounts for a further US$27.6bn. Of the US$63.3bn assessed for commerce and industry, US$37.4bn concerns restoring services rather than rebuilding premises. In energy, US$70.8bn relates to reconstruction of the power system, where generation assets account for most of the recorded damage.

Geography narrows the picture further. Donetsk, Luhansk, Zaporizhzhia and Kherson oblasts, large parts of which are occupied or close to the front line, account for just over 40 per cent of assessed needs.

Only a small share of the assessed need has so far become completed work. RDNA5 records at least US$20.3bn of needs met between February 2022 and December 2025, equivalent to 3.5 per cent of the ten-year total, and notes that data on needs met are incomplete in several sectors.

For 2026 the government selected priority investment projects and programmes worth US$15.25bn. When the assessment was presented, the responsible ministry reported US$5.8bn of available funding and a gap of US$9.5bn. The largest shortfalls were in energy, housing, transport, and water supply and sanitation. Heat supply alone required US$1.6bn in 2026, of which less than 1 per cent had been secured. The priority list also includes programmes outside construction, such as demining and economic support.

External finance has grown, but much of it supports the state budget, energy imports or bank lending rather than construction. The EU's Ukraine Facility releases funds against reform commitments under the Ukraine Plan, and had disbursed more than €29.5bn by mid-2026, mostly as budget support.

At the Ukraine Recovery Conference in June 2026, the European Commission announced the first disbursement of €3.2bn in budget support under the separate €90bn Ukraine Support Loan, together with the first instalment of a €6bn defence package. The same announcement put commitments under the Ukraine Investment Framework, the EU's guarantee and grant instrument, at €8.5bn. The Commission expects these commitments to mobilise nearly €26bn in public and private investment.

The EBRD deployed a record €2.9bn in Ukraine in 2025, including more than €1.2bn for energy security. Its 2025 energy financing helped procure 2.3bn cubic metres of gas. The bank has also supported the grid operator Ukrenergo in buying 43 autotransformers and building 36 associated protective structures.

Public funding faces additional pressure. In mid-September 2026 the prime minister described the state of public finances as close to critical. He warned that Ukraine could lose a significant part of US$29.5bn in planned international financing if parliament did not pass the required legislation on schedule.

The measures in the table below correspond to different stages between physical need and construction activity. They cannot be added together, because each measures a different quantity.

Construction output, prices and capacity constraints

Ukrstat's construction output index measures changes in the physical volume of work. It rose by 6.8 per cent in 2021 and then fell to 35.2 per cent of the 2021 level in 2022. Growth resumed in each following year, but at a declining rate. Revised Ukrstat data show volume growth of 31.8 per cent in 2023, 17.8 per cent in 2024 and 11.3 per cent in 2025.

In current prices, output in 2025 was broadly equal to the UAH 258bn recorded in 2021. A ministry analysis of the sectorconcluded that construction had exceeded its pre-war level on several indicators. That comparison, however, is distorted by price growth. Prices for construction and installation work had already risen by 17.5 per cent in 2021. They then rose by 27.4 per cent in 2022, 15.8 per cent in 2023, 7.9 per cent in 2024 and 5.8 per cent in 2025, a cumulative increase of about 68 per cent after 2021.

Adjusting nominal output for these price increases suggests that the physical volume of construction work in 2025 was roughly 40 per cent below the 2021 level. Chaining the annual volume indices gives a similar result, with 2025 at about three-fifths of 2021. Both figures are calculations based on published series rather than official statistics. Part of the gap reflects the narrower territorial coverage of data since 2022.

The mix of work also shifted. In 2025, engineering structures, a category that includes roads, bridges and utility networks, accounted for about 53 per cent of output. Non-residential buildings accounted for about one-third and residential buildings for about 13 per cent. Repair, reconstruction and technical re-equipment made up 60 per cent of all work, and new construction the remaining 40 per cent.

The recovery reversed in 2026. The volume index was 3.3 per cent higher year on year in January. Cumulative output was then 1.8 per cent lower in January and February, 6.5 per cent lower in January to May and 11.2 per cent lower in January to July. July output was 25.9 per cent below July 2025. Engineering structures fell by 36 per cent and non-residential buildings by 15.9 per cent, while residential construction rose by 0.5 per cent.

Construction prices moved in the opposite direction. Prices for construction and installation work in June 2026 were 23.1 per cent higher than a year earlier, against an increase of 5.8 per cent for 2025 as a whole. Industrial producer prices, which cover manufacturing, including building materials, and energy supply, were 45.2 per cent higher in May 2026 than a year earlier. As a result, nominal construction values in 2026 overstate physical activity by a wider margin than in previous years.

Construction firms report supply-side constraints more often than weak demand. In Ukrstat's business survey for the third quarter of 2026, 53.6 per cent of construction companies expected labour shortages to restrict activity and 47.9 per cent cited financial constraints. Only 20.7 per cent cited insufficient demand. Order books covered six months of work on average, the same as at the start of 2022, and about a quarter of respondents expected to cut staff. RDNA5 similarly finds that firms across the economy name skilled labour shortages as their main production constraint.

Falling volumes combined with rising prices in 2026 are consistent with these constraints. However, the available data cannot separate their effect from higher energy, materials and logistics costs. For context, the economy as a whole grew by 0.4 per cent year on year in the second quarter of 2026.

Housing completions and new residential permits

Housing completions and new residential permits have followed different paths since 2021. Completed residential floor area fell from 11.4 million m² in 2021 to 7.1 million m² in 2022. According to Ukrstat, it rose by 21.1 per cent in 2024 to 9.76 million m² and then fell by 2.1 per cent to 9.55 million m² in 2025.

Floor area covered by new residential construction permits fell further and stayed low for longer. It dropped from 12.7 million m² in 2021 to 3.9 million m² in 2024, before rising by 49.4 per cent to 5.8 million m² in 2025.

In every year since 2022, completed floor area has exceeded the floor area of newly permitted housing. Market commentary attributes this to developers finishing projects started before the full-scale invasion while postponing new launches. Even after the 2025 increase, permitted floor area remained below half of its 2021 level.

In the second quarter of 2026, permitted floor area was 6.1 per cent higher than a year earlier. Permits for multi-apartment buildings in the first half of the year were, however, 2.3 per cent lower. Future demand for building materials in housing depends on how many of these permitted projects go ahead.

The table below summarises the main annual indicators for 2021 to 2025.

Funded demand in 2026 and how it is purchased

Demand for building materials in Ukraine in 2025 and 2026 can be traced to several funding pools. They differ in who pays and in who decides what is bought. The table summarises the documented features of each pool.

Household repair and housing compensation

The state eRecovery programme pays public compensation to households for damaged and destroyed housing. By 10 July 2026 it had paid UAH 119.1bn to 231,681 families.

Compensation for damaged homes is implemented within the World Bank's HOPE project. It amounted to UAH 14.8bn for more than 153,000 families, up from UAH 11.8bn for about 121,400 families in December 2025. Average payments were UAH 69,900 for minor repairs and UAH 340,900 for major repairs. The funds are credited to a dedicated card that can be spent on building materials or contractor work, and the card is accepted only by stores and contractors registered in the programme.

Housing certificates for destroyed homes totalled UAH 96.9bn for more than 74,000 families, of whom more than 33,000 had bought a new home by July. Since December 2025 the programme has also issued vouchers worth UAH 2m each. These are for displaced persons from occupied territories who are combat veterans or have war-related disabilities, and 3,296 applications worth UAH 6.59bn were approved in the first funding round.

More than four-fifths of all eRecovery payments have therefore paid for the purchase of housing rather than for repairs.

Protective works for energy infrastructure

Physical protection of energy facilities became a major public construction programme in 2026. It followed attacks in the autumn and winter of 2025 that left large parts of the country without power and heating. Since March, public bodies have tendered protection for nearly 250 substations, transformers and cogeneration units worth UAH 24.3bn. Most of this work is financed from a UAH 22.06bn allocation from the state budget reserve fund, approved by the Cabinet of Ministers on 20 March 2026. Procurement runs mainly through regional state administrations.

By the end of March the reserve fund had already allocated UAH 47.5bn, close to its legal ceiling of 1 per cent of general-fund expenditure. The state Restoration Agency is also building engineering protection at more than 100 critical-infrastructure sites and publishes data on the construction materials bought for this work.

These projects create demand for reconstruction materials, particularly concrete and reinforcing steel. GMK Center, citing the steel trader Metinvest-SMC, reports that rebar consumption rose by 26 per cent to 447,000 tonnes in the first half of 2026. It attributes the rise mainly to infrastructure projects and protective structures for energy facilities.

Internationally financed projects

Internationally financed projects reach the construction market through the organisations that own the assets. In 2025, EBRD financing went to three groups:

• state companies, including Naftogaz and the state railway operator

• urban transport, wastewater and district heating projects in Lviv, Dnipro, Kharkiv, Mykolaiv and Cherkasy

• private companies

Part of the support under the Ukraine Investment Framework is channelled through banks as loans to small and medium-sized enterprises. In every case, demand for materials arises only when an asset owner commissions works and its contractors buy the inputs. Each programme sets its own conditions for participation, which are covered in our analysis of how companies take part in Ukraine's reconstruction projects.

Private logistics and industrial construction

Private logistics construction has continued despite repeated destruction. Developers delivered about 216,000 m² of new warehouse space in 2025, the highest annual volume since 2008 according to market data. Attacks then destroyed around 300,000 m² of warehouse space in the first half of 2026. In this segment, developers and their contractors choose the building systems for their own projects.

RDNA5 estimates that private capital could finance up to 40 per cent of recovery needs over the decade. That depends on reforms to the business environment, access to finance and labour supply.

Domestic supply and imports by material category

National and sector data do not point to a general shortage in Ukraine's building materials market. Supply positions differ by material, as the table below shows. The sources also differ by category, ranging from producers' associations and steel-market analysts to an investment guide presented at an international conference, so the rows are not strictly comparable.

Cement

Cement production fell from 11.0 million tonnes in 2021 to 5.4 million tonnes in 2022, then recovered to 7.93 million tonnes in 2024. According to an Experts Club analysis, producers regard about 8 million tonnes a year as the practical ceiling given current risks and logistics.

Domestic consumption fell from about 10.6 million tonnes in 2021 to around 6.3 million tonnes in 2024. Imports that year amounted to only about 40,000 tonnes. Exports rose from about 56,000 tonnes in 2021 to 1.7 million tonnes in 2024. A September 2026 industry report put exports at 23 per cent of output, with Poland the main destination. At current demand, the industry therefore operates with a domestic surplus.

Further capacity depends on consumption recovering. At a 2024 briefing by the producers' association Ukrcement, restoring the plants in Balakliia and Kramatorsk was cited as one way to raise output. Two producers were also reported to be considering new clinker kilns with combined capacity of 2.4 million tonnes, to be built once consumption reached about 10.5 million tonnes.

In 2024 the Irish building-materials group CRH completed the purchase of two Ukrainian cement plants from Buzzi for €100m. In September 2025, Ukraine's Supreme Court upheld the conditional competition clearance for the deal.

Steel and reinforcing bar

Ukraine's steel output fell from 21.3 million tonnes in 2021 to 6.26 million tonnes in 2022 and stood at 7.41 million tonnes in 2025. Imports supplied a growing share of domestic steel consumption, rising from 22.6 per cent in 2021 to 37.6 per cent in 2024. The share then reached 40.1 per cent in 2025 and 46.1 per cent in January to July 2026. Flat products made up about two-thirds of imports, and rails are supplied through imports, including as donor aid. In spring 2026 the OECD cut its estimate of Ukraine's steelmaking capacity from 38.7 million tonnes to about 8 million tonnes a year, close to actual output.

For long products used in construction, imports and unused domestic capacity existed side by side. GMK Center reported that the rebar and wire-rod mills of ArcelorMittal Kryvyi Rih and Kametstal were operating at about 55 per cent of capacity in mid-2025, while competing with imports on price.

That capacity then shrank. Zaporizhstal stopped production after missile strikes on 11 and 27 August 2026, and Kametstal stopped after a strike in early September. Metinvest, which owns both plants, declared force majeure on some contractsand gave no date for restarting production. National steel output fell to 277,000 tonnes in August, 57.3 per cent below August 2025, and GMK Center expects output to be lower still in September. Installed capacity therefore says little about the steel actually available to the construction sector in the second half of 2026.

Float glass

Ukraine has no operating float glass line, and its only sheet-glass plant, in Lysychansk, is in occupied territory. Consumption of 11.2 million m² in 2023 was therefore met entirely by imports.

The Ukraine Investment Guide 2026, presented at the Ukraine Recovery Conference in Gdańsk, expects reconstruction to raise demand to at least 27 million m² a year. It lists three domestic float glass projects with combined planned capacity of 73.7 million m². Under an optimistic scenario these plants would start production between 2028 and 2030.

Most of the financing had not been raised by mid-2026. NovaSklo had invested US$5.2m of a planned US$306.5m before 2026, and Ukrglass US$13.9m of US$278.5m.

The current dependence on imports is structural. It does not, however, show what margins a new supplier could earn, whether it could reach the glass processors and window manufacturers who buy float glass, or how it would compare with established exporters. These questions can only be answered at product and company level.

Plasterboard and dry mixes

Public summaries of national statistics do not give consistent series for plasterboard consumption or imports, so the supply picture rests on capacity data for the main producer. Knauf lost its Soledar plant, which could produce up to 60 million m² of board a year, when the town was occupied in January 2023. Its Kyiv plant, with capacity of about 25 million m², remained in operation.

In January 2025 the company began building a €150m facility in Borshchiv, where its main gypsum quarry is located. The facility is designed to produce 30 million m² of board and 320,000 tonnes of dry mixes a year. According to the Ternopil regional administration, the first phase, a dry-mix plant, produced its first output in August 2025. The plasterboard line is planned as a second phase.

Without national data, the adequacy of domestic plasterboard supply cannot be assessed in the same way as for cement or steel.

Insulation and building-envelope systems

Insulation and envelope systems have the thinnest public evidence base. In mid-2022 developers warned of a shortage of mineral wool after one of the largest plants, near Kharkiv, was destroyed. No comparable national data on current production or imports have been published in summary form.

GMK Center notes that Ukraine imports part of its galvanised and painted steel coil, which is used in roofing and cladding, although domestic output of painted coil has grown.

Kingspan, the Irish building-materials group, began construction of a €280m campus near Lviv in April 2025 to produce insulation and related building products. Most of the facility is due for completion by 2030. Until then, this capacity does not add to available supply.

Logistics and product conformity

Import logistics

Sea import routes were disrupted in 2026. From July, sustained attacks on ships and port infrastructure led most shipowners to suspend calls at the Greater Odesa ports. Container lines including Maersk and CMA CGM rerouted Ukrainian cargo through Constanța. Shipping remained disrupted in September, when Russian strikes again targeted Odesa and the surrounding region.

Cargo that used to pass through Odesa has shifted to Romanian ports and to rail and road routes from the EU. Metinvest reported that importing coal by these alternative routes raised its logistics costs by 50 to 60 per cent.

The impact differs by product. For bulk materials with a low value per tonne, freight makes up a larger share of the delivered price. For engineered building systems, higher transport costs mainly increase inventory and working-capital requirements.

Conformity requirements for construction products

Ukraine has been aligning its rules for construction products with EU law as part of its European integration commitments. The steps so far are as follows.

• 2006. The Cabinet of Ministers adopted a technical regulation that governed construction products until the new law took effect.

• 2020. Parliament adopted the Law "On Providing Construction Products on the Market" to implement the approach of Regulation (EU) No 305/2011.

• 1 January 2023. The law entered into force. As a general rule, manufacturers must draw up a declaration of performance through the Unified State Electronic System in Construction and apply the Ukrainian mark of conformity.

• Until 2025. Transitional provisions allowed the law and the earlier technical regulation to apply in parallel.

A wartime provision applies to products imported from the EU. Since March 2022, a Cabinet of Ministers resolution has allowed construction products imported from EU member states to be sold in Ukraine on the basis of the foreign manufacturer's declaration of performance under Regulation (EU) No 305/2011, accompanied by a copy in Ukrainian. The provision remains in force until martial law ends and for 90 days afterwards.

This provision was inserted into the earlier technical regulation, so whether it still applies after the parallel period should be confirmed for each product. Products outside its scope follow the national procedure.

Further alignment has been planned but not yet adopted. The EU is replacing Regulation (EU) No 305/2011 with Regulation (EU) 2024/3110. Most provisions of the new regulation have applied since January 2026, while parts of the old regime remain in force until 2040. In June 2026 the ministry presented a concept for transposing the new regulation, which favours amending the existing law in stages. The work is linked to the internal market cluster of Ukraine's EU accession negotiations.

Mutual recognition of conformity assessment between the EU and Ukraine would require an Agreement on Conformity Assessment and Acceptance of Industrial Products, which has not yet been concluded. Its first phase is expected to cover machinery, low-voltage and electromagnetic-compatibility products, and the Government of Ukraine describes it as a future agreement for these three sectors. Construction products are not among them.

Requirements for a specific product should be confirmed with qualified conformity-assessment or legal advisers.

Purchasing structure and routes to market

The purchasing structures described above vary by demand pool and material. They indicate which routes to buyers are relevant for which products, but they do not decide the choice for any individual company.

Some products are bought frequently, through fragmented channels, and need to be held in local stock. Materials bought with eRecovery funds at registered stores are an example. For these products, the purchasing structure makes a Ukrainian distributor or retail partner the relevant route to buyers. How well that route works depends on each partner's coverage, stock-holding and sales capability. These can only be assessed partner by partner, as discussed in our analysis of finding a distributor in Ukraine.

In other pools, a small number of asset owners, developers or contractors account for most purchases, and products are chosen at the design stage. Here, access depends on working with those organisations before the works are put out to tender. The funding data for 2025 and 2026 identify state energy and rail companies, municipal utilities and logistics developers as buyers of this kind.

Local production becomes relevant where volumes are predictable, freight makes up a large share of delivered cost or customers need local service. The Knauf and Kingspan investments are examples of established producers building capacity in Ukraine. The float glass projects apply the same reasoning to a category that currently depends on imports. Whether local production is justified for a particular product is a separate investment decision, discussed in our analysis of manufacturing in Ukraine.

In cement, where domestic capacity exceeds consumption, the CRH deal shows a producer using an acquisition to expand its position in a heavy-material market supplied locally. The deal required conditional competition clearance and went through litigation. What such a transaction secures, and how it should be valued, is covered in our note on buying a company in Ukraine.

Some demand remains conditional, because it depends on unfunded 2026 priorities, on reconstruction in occupied or front-line areas, or on permitted housing projects that have not yet started. For products that rely mainly on these pools, the timing of any commercial commitment depends on developments that current data cannot confirm.

National and sector data establish levels of activity, funding structures, domestic production, import dependence and the main ways materials are bought. They cannot establish whether a particular foreign product would earn adequate margins, or whether Ukrainian designers and contractors would accept its brand and specifications. Nor can they show whether a given distributor is capable, whether local manufacturing would be viable for a specific company, or whether an acquisition would be better than building a new plant. These questions require analysis at the level of the company and the product.

The construction materials market in 2026

In September 2026, the construction materials market in Ukraine is smaller in physical terms than in 2021 and is contracting again after three years of growth.

Construction output in January to July 2026 was 11.2 per cent lower in volume than a year earlier, while prices for construction and installation work in June were 23.1 per cent higher than a year before. In July, engineering works, the largest segment in 2025, fell most sharply, while residential construction stayed close to its level a year earlier. Permits for new housing rose in 2025 and in the second quarter of 2026, but from a low base.

Funded demand is concentrated in a few identifiable programmes:

• Compensation payments fund household repairs through retail stores and small contractors and, on a much larger scale, the purchase of housing.

• Protective works for energy infrastructure were funded largely from a reserve fund that was close to its legal limit by the end of March.

• Internationally financed projects reach the market through state companies, municipalities and banks.

• Government priorities for 2026 were mostly unfunded when the list was published.

• Private logistics development continues, even as existing warehouses are repeatedly destroyed.

Execution is constrained on several fronts. Construction firms name labour and finance as their main constraints. Sea imports through Odesa have been disrupted since July, and domestic steel output fell sharply after strikes on two major plants.

Supply positions differ by material. Cement is produced with a surplus that is exported. Float glass depends entirely on imports. Capacity for plasterboard and insulation is being rebuilt or added by established producers.

Conformity requirements follow the EU model but are still in transition. Products imported from the EU have a wartime route to the market, and no mutual recognition agreement yet covers construction products.

Developments in operation, under way and conditional

Several elements of the market are already operating:

• eRecovery payments

• energy-protection works contracted in 2026

• domestic cement capacity of about 8 million tonnes a year

• Knauf's Kyiv plant, and the dry-mix line in Borshchiv, which began production in August 2025

• a domestic steel industry whose capacity was reduced by the strikes of August and September 2026

Other developments are formally committed or under way. They include the €8.5bn of commitments under the Ukraine Investment Framework, ongoing EBRD operations and Kingspan's campus near Lviv, where construction began in April 2025 and most of the facility is due by 2030.

A further group of developments is officially planned but not yet delivered:

• the unfunded part of the government's 2026 priorities

• the three float glass projects

• the plasterboard line in Borshchiv

• the transposition of the EU's new Construction Products Regulation

• an agreement on conformity assessment whose first phase would not cover construction products

Beyond these, the outlook is conditional. RDNA5 projects economic growth of around 2 per cent in 2026 if hostilities continue throughout the year. If a ceasefire is in place by the end of 2026, it projects growth of 4 per cent in 2027 and 4.5 per cent in 2028.

The National Bank of Ukraine has since lowered its 2026 growth forecast to 1.3 per cent. It expects growth of 2.8 to 3.7 per cent in 2027 and 2028, assuming economic conditions gradually normalise and geopolitical tension eases. In cement, the industry's stated threshold for major capacity investment is domestic consumption of about 10 million tonnes a year, roughly 60 per cent above the 2024 level. Whether and when construction activity reaches such levels depends on security, financing and construction capacity, and current data do not allow any of these to be forecast with confidence.

Company-level questions of this kind are addressed in a structured market entry assessment. The wider sector context is covered on our construction and building materials page.