Industrial production in Belarus decreases, outflow of personnel increases, debts grow

    Domestic industrial flagship companies have reported on production and financial results. This sector of the economy is in a slowdown. By the end of October, for the first time this year, industrial production in Belarus has dropped (by 0.1%).

    In the 1st quarter, industrial production grew by 9.2%, in the 2nd quarter – by 11.6%. However, in the 3rd quarter, production increased by only 2.9%, with September being the worst month in the quarter. The low base effect of 2020 has been exhausted and rapid growth is no longer expected. In the 4th quarter of last year, production grew by 2.6%. Against the background of a 3.5% decline in the 2nd quarter of 2020, this is a lot.

    In addition, external demand for Belarusian products is decreasing. In October, the wholesale turnover in the country decreased by 3.3% compared to 2020. The negative dynamics were due to the leaders of the manufacturing industry. In October, gross value added in this field, compared to the level of 2020, dropped by about 1 – 1.2%.

    On November 7, the first power unit of the nuclear power plant was again disconnected from the power grid. In October, the nuclear power plant was in operation for almost a full month. Failure to connect the station back to the power grid will cause a drawdown in gross results in the industry.

    For 9 months, the workforce at the industrial flagships has decreased – to 713 thousand against 721.5 thousand in 2020. In January – September, there was a net outflow of personnel in the industry: 117.8 thousand people were dismissed, and only 109.3 thousand people were hired. The replacement rate on the labour market in the industrial sector has shifted to the “red” zone. In average, there were 928 people hired against every 1,000 people dismissed.

    Revenue and profit from sales in the industry are still growing significantly compared to 2020. For 9 months, revenue has increased by 30.7%, profit – by 33.7%. However, this is partly due to the effects of deferred payments in the industry, and partly – to the rapid rise in prices on the external market.

    At the end of 9 months of 2021, the average return on sales at the industry flagships increased to 9.7% (from 9.5% in 2020). At the same time, profitability in the manufacturing industry decreased – from 10.7% to 10.2%. The median profitability is much lower. For 9 months, about 18.6% of flagships have shown profitability below zero (sales losses), and another 30% – profitability within the range between 0 and 5%. As for the flagships of the industry, only 7.8% of the companies had profitability above 20% and only 2.3% of them – above 30%.

    As of October 1, the total debts of manufacturers amounted to BYN 93.1 billion. Since the beginning of 2021, debts have grown by 20.7%. For 9 months, the industry leaders paid BYN 38.2 billion on loans and borrowings, which is 10.4% more than in 2020. For these purposes, debtors paid 32.6% of their revenue to creditors (against 26.9% in the economy as a whole).