Page 42 - UKRRptFeb24

4.5 Labour and income
4.5.1 Labour market, unemployment dynamics
The official number of unemployed workers in Ukraine continues to decrease. As of January 1, 96,120 people were unemployed in Ukraine, while on January 1, 2023, this indicator was 186,508 people.
Several key economic sectors in Ukraine expect to reduce the number of employees in 2024. According to NBU data, industrial enterprises are predicting a deterioration in the results of their economic activity for the second month in a row in December.
The reasons for this are a decrease in the volume of export-import operations, increased logistics costs due to the blocked borders, and high fuel prices. As a result, 78% of businesses plan to keep the current number of employees, 6% will hire new ones, and 15% plan layoffs.
For the third month in a row, construction enterprises were the most pessimistic among economic sectors about the economic results of their activities in the near future, considering the seasonal drop in economic activity, the narrowing of investment demand, and the lack of qualified personnel. At the same time, expectations to reduce the total number of employees increased. In particular, businesses that will maintain their current staffing level will remain at 70%, those who anticipate newly hired employees at 5%, and those planning layoffs at 25%. As for the trades, new hires will prevail over dismissals - 9% against 8%. Nevertheless, most companies in this sector do not intend to change the number of their employees - 84%.
4.5.2 Nominal wages dynamics
Ukrainian wages have been growing for three quarters in a row, and inflation has fallen below the NBU’s target for the first time in three years. The revival of the economy and the slowdown of inflation have both contributed to the recovery of the growth in real wages since the second quarter of 2023. According to the National Bank of Ukraine, the salary increase was also maintained in the fourth quarter. However, wage growth has been uneven across sectors. For example, in the third quarter of 2023, average wages in trade, IT, and other industries in real terms exceeded Q3 2021 (i.e., before the full-scale invasion). On the other hand, salaries in specific service sectors, such as construction, education, and transport, remained lower than this level. Budget expenditures on the military, pensions, and social benefits remained a significant source of household income growth. At the same time, consumer inflation in Ukraine slowed to 5.1% in November 2023 due to a further reduction in pressure from business costs, primarily due to cheaper raw materials and improved expectations for maintaining exchange rate stability. However, the NBU did not provide price growth estimates for December. According to data, annual inflation fell below 5% for the first time since November 2020.
42 UKRAINE Country Report February 2024 www.intellinews.com