Belarusian industry is unlikely to generate new jobs

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March 06, 2017 10:39
Фото: Валентин Михальцов, TUT.BY

In January 2017, layoffs surpassed hires in Belarus by 4600 people. Layoffs are common in January due to a slowdown in business activity. As demand for products increases, companies will hire new employees and when peak demand falls, layoffs are likely to resume and employment in industry is likely to decrease by the year-end.

According to the National Statistics Committee, in January 2017, some 40 000 people were hired and 44600 were laid off from Belarusian enterprises. Layoffs have surpassed hires the most in retail trade, construction and agriculture. The IT is the only industry where hires consistently surpassed layoffs.

Over the last five years, employment in the economy always decreased in January. The lowest layoffs were reported in January 2014 - only 100 people. The January employment trend is due to a slowdown in business activity, given numerous public holidays and common leaves for one or two weeks. In addition, exporters, who work mainly with Russia, usually start operations only in the second decade of January. Employees often use the holiday season to find a new job.

In January 2017, Belarus' industry reported an increase in quantitative indices. The industrial production index totalled 105.9% compared with January 2016, real wages in industry rose by 4.9% over the year. However, increased demand has not changed the employment trend. From the 16 types of industrial production only five reported an increase in employment, others only held layoffs and overall layoffs in the industry as a whole totalled more than 1000 people. This implies, that the overall excess labour has retained.

Investment climate in Belarus is not very attractive for new companies with foreign capital. Most large and medium domestic enterprises do not have enough funds to expand production. Rather, enterprises are interested in boosting the productivity of existing employees. In some industries, demand for new employees is seasonal.

In the absence of sufficient budgetary resources to support loss-making enterprises, employment in the economy is likely to continue to reduce due to reorganisations at state-owned enterprises. As compared with 2016, layoffs in industry are likely to decrease, however the overall employment in industry is unlikely to increase by the year-end.

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