No turning point on labour market in July: in 2017 layoffs will outpace hires in Belarus

For the first time in 2017, in July, hires have outpaced layoffs in Belarus. As compared with 2016, layoffs reduced significantly in many industries and enterprises resumed recruitment of new employees. Without new jobs, net layoffs in the economy are likely to persist and the number of those dismissed could reach 40,000 -45,000 people by the year-end.

According to Belstat, in July 2017, Belarusian enterprises hired 65,300 people and laid off 63,700 people. On a clean basis, 1,600 people were hired. For the first time in 2017, hires outpaced layoffs. Seasonal factors have influenced the labour market situation. As a rule employment in summer goes up due to the harvesting campaign in agriculture, outbound trade in retail and replacement employees due to summer holidays. In the summer, education workers actively look for new jobs, which reflects in statistics as high layoffs and reduced hires. A stable net employment and demand for new workers throughout the year is in the IT sector.

There were fewer negative trends on the labour market in 2017 as compared with 2016. In January-July 2017 34,000 people were laid off against 82,000 people in 2016. In 2016, in industry, only pharmaceutical and chemical industries reported more hires than layoffs, in 2017, oil refining, food producers, metallurgy and manufacturers of machinery and equipment joined added to the list. Following wage growth, the situation in retail has changed, and retail chains have reduced or stopped laying off workers. Most layoffs in 2016 were reported in the construction industry, in 2017, net layoffs decreased four-fold in seven months.

Despite some improvements on the labour market, the crisis has not been fully overcome. Large public sectors of the economy, education and health care, do not generate new jobs anymore and optimisation is ongoing in the government. Some civil servants will lose the status of a ‘civil servant’ by the year-end, which could lead to dismissals and transfers. The situation in the industry largely depends on unpredictable external factors. Assets restructuring in agriculture would continue after the harvesting campaign, including further layoffs. Amid abandoned attempts to reform the economy and the lack of progress in creating new jobs, by the year-end, layoffs are likely to outpace hires by 40,000-45,000 people. Officials are likely to report about a sufficient number of new jobs and unemployment circa 1%, however, employment in the economy is likely to decrease.

Thanks to the seasonal employment in agriculture and trade in July, hires outpaced layoffs in the economy for the first time in 2017. However, due to the lack of new jobs, by the year end, net layoffs are likely reach 40,000-45,000 people.