Russia faces record workforce shortages, manufacturing sector hit hardest
They reached a historic low in the third quarter of 2024, per Russia's Central bank.
Russia is experiencing unprecedented workforce shortages, with the situation reaching a historic low in the third quarter of 2024, according to a report by the Central Bank of Russia. The bank’s monitoring, which included 13,300 companies, revealed that the availability of workers has hit the lowest point since records began.
The Central Bank of Russia stated that manufacturing enterprises producing investment and consumer goods are feeling the most acute shortage of personnel. Despite the challenges, Russian companies still plan to increase their workforce in the fourth quarter, although their hiring plans have become more modest.
According to Liga, Russian MMI analysts commenting on the monitoring results noted that the number of enterprises experiencing staff shortages continues to increase. They added, “It’s unclear what could reverse this trend, especially given the decision to increase the number of military personnel.”
Analysts warn that labor shortages will continue driving wages and prices up, but declining profitability could eventually force companies to cut production.
Despite these challenges, Russian enterprises saw only a slight drop in capacity utilization, reaching 80.4% in the third quarter, near the record high of 80.7% at the end of 2023. Additionally, the Central Bank of Russia’s business climate indicator, based on survey data, rebounded in October following a four-month slowdown.
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