2017-05-09
The survey of the Bank of Lithuania indicates – last year, almost half of the enterprises in the country raised wages; a similar part of them believe that wages will still be rising fast for approximately two more years. Almost every third enterprise is planning to expand its business in the near future.
‘Enterprises emphasised robust wage growth, which is basically driven by lack of employees; however, part of them also noted it is not an endless process. For example, 62 per cent of the surveyed construction enterprises and 52 per cent of trade enterprises claimed they could face a shortage of funds due to raising wages already in a relatively near future,’ Petras Dubinskas, Senior Economist of the Macroprudential Analysis Division at the Bank of Lithuania, commented.
Nearly half of the surveyed enterprises reported having raised wages for their employees in the second half of 2016. Compared to the survey conducted half a year ago, the share of such enterprises increased by 5 percentage points (from 43% to 48%). Raising wages further in the next half-year was planned mainly by large enterprises (52%) and construction enterprises (53%). About a third of enterprises reported such a decision was driven by lack of employees. More than every fourth enterprise reported that the trends in the development of their business and the legal regulation of labour relationship were contributing to the raising of wages (28% and 27% respectively).
Enterprises that are planning to raise the prices for their output or services in the next half-year increased in number: the share of such enterprises increased from 25 per cent to 36 per cent over the year, the expansion in this section being the most pronounced within the trade sector (from 29% to 48%).
Nearly every third enterprise is planning business expansion, an increase of 9 per cent from the previous half-year (this share increased from 22% to 31%). This is planned mainly by trade enterprises (35%), the least – by construction enterprises (27%).
Major concerns for enterprises are currently stemming from tax burden (42% of the surveyed), severe competition (37%), and lack of clients (31%).
According to enterprises, the major risks for their business to be faced in the near future are the low purchasing power of clients, the rising prices of resources, and the deteriorating demographic situation in the country. Low purchasing power of clients was a major concern for trade enterprises (78%) and small enterprises (66%), while the deteriorating demographic situation – for large enterprises (42%) and trade enterprises (45%).
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The Bank of Lithuania will publish the full Review of the Survey of Non-financial Enterprises in the near future.