SERGEY TSUKHLO: “STAFF SHORTAGE REMAINS RECORD HIGH”

In March, the Gaidar Institute's opinion polls showed an improvement in demand indicators at industrial enterprises. Representatives of enterprises said that they were satisfied with sales volumes, however, growth in demand has increased the shortage of personnel. According to the survey, Russian industry demonstrated record hiring in March, which, according to respondents’ estimates, will continue in the coming months.

“The record shortage of personnel was registered in October 2022 after the announcement of partial mobilization. The personnel shortage is also affected by the complete degradation of the system of secondary vocational education,” explained Sergey Tsukhlo. The light industry was given a unique chance, while it is catastrophically short of workers.

In 2023, the situation improved slightly, but the shortage of personnel remains at a record high level. The economist noted that light industry enterprises also lack equipment, however, it is easier to fill it rather than find qualified employees. It is planned to buy equipment from Asian countries, e.g. China or India. European equipment is more expensive and amid sanctions it became unaffordable, Sergey Tsukhlo explained.

Nevertheless, entrepreneurs are not yet ready to invest in their own plants: to expand production and modernize equipment. According to the survey, 68% of respondents said that they lack clarity and predictability of the macroeconomic situation in order to resume investment activity. According to 48% of respondents, "reviving production" will help reduce prices for equipment and building installation; 40% of respondents believe that the end of the sanctions war and a return to the previous economic relations between Russia and the West will help resume investment.

The study notes that the Russian industry's supply of raw materials and components has also reached its maximum since sanctions began. Besides, enterprises maintained a rise in prices in March. As Sergey Tsukhlo explained, the SMO and sanctions are not that bad for the industry, however, the shortage of personnel today is comparable with 2008, when the industry was "heated up" to a very high degree. The second time similar values were registered in January 2022, then the economy was recovering from the Covid crisis and the demand for all products increased significantly.