For the fourth consecutive month, entrepreneurs have identified a shortage of labor as one of the top three challenges for conducting business. In December 2024, this issue once again topped the rankings, according to data from the monthly enterprise survey conducted by the Institute for Economic Research and Political Consulting (IERPC).
"Compared to the previous month, there were minor changes: 55% mentioned that it is unsafe to work in December, up from 54% in November. This indicates that the figure has remained consistent with many previous months. Since spring last year, more than half of businesses have consistently pointed to this problem," - quotes the press service of senior researcher at IERPC, Evgeny Angel.
The option "unsafe to work" ranked second among business challenges, the IERPC added.
The business obstacle that completes the top three has changed. According to Angel, in December, disruptions in electricity, water, or heating supply moved to third place with a rate of 51%, while the rise in prices for raw materials, goods, and materials dropped to fourth place with a rate of 42%.
The institute reported that in December, enterprises slightly improved their production indicators, and their expectations remained positive and stable.
The Business Activity Recovery Index (BARI), like in November, stood at 0.16.
It was noted that the share of enterprises operating at nearly full capacity increased from 40% in November to 42% in December, while the proportion of those working at 100% capacity rose from 10% to 11%.
"Overall, 53% of respondents are operating at full or nearly full capacity. For the situation in the third year of war, this indicator demonstrates the resilience and adaptability of businesses," said IERPC Director Oksana Kuzyakiv.
As for the aggregated indicator of industrial prospects (AIIP), which takes into account production expectations, assessment of finished goods inventories, and order portfolios, it has not significantly decreased to 0.07 compared to 0.08 in November, but this negative trend is consistent. It is confirmed by the increase in business uncertainty in the three-month outlook; in particular, among exporters, in December, 18.9% of companies were unable to assess their short-term prospects, up from 12.4% in November. At the same time, the majority of entrepreneurs—80.9%—do not plan layoffs in the two-year outlook.
Production showed a slight improvement in December: the share of entrepreneurs who increased production volumes rose from 20.9% to 25.2%. However, when businesses were asked about prospects for the next three to four months, the proportion of those planning to increase production decreased from 33.3% to 29.6%.
"The index of expected changes in exports increased from 0.27 to 0.33. This is mainly explained by the rise in the share of those planning to increase exports—from 30.6% to 35%—and the decrease in the share of those planning reductions—from 9% to 4.9%," noted Kuzyakiv.
Additionally, after a significant rise in September-October, the average term for new orders in November-December decreased to 6.2 months (the November figure was 6.7).
Regarding the labor market, 82.8% of enterprises do not plan changes; however, the proportion of those looking to hire workers decreased from 14.1% in November to 11.8% in December, as did those planning layoffs—from 6.8% in the previous month to 5.4% in the last month of winter. There was a sudden increase in the share of enterprises planning to send employees on forced leave—from 4.2% to 10.3%.
According to IERPC information, the severity of the labor issue has slightly decreased. The difficulty in finding qualified employees was reported by 51.6% of respondents in December, down from 55.5% in November. For unskilled personnel, 34.8% of businesses find it challenging to hire, compared to 38.9% in the previous month.
According to Kuzyakiv, this may be linked to enterprises' growth plans, as when they do not plan to increase production, additional labor is not needed.
In the December New Monthly Enterprises Survey (#NRES) conducted by IERPC, 470 Ukrainian industrial enterprises from 21 out of 27 regions of Ukraine participated. The field phase took place from December 16 to 31.