Companies appear to have reacted to the evolving uncertain macro factors in Russia and Ukraine as new job postings have declined by 20 per cent and 24 per cent respectively in February 2022 (data updated to February 21, 2022) compared to January 2022, according to GlobalData.
Globally, hiring activity has been largely robust in 2022 but the broader implications of economic sanctions placed on Russia could dissuade potential employers in the two European countries. Europe and U.S. headquartered companies that are the biggest employers have reduced new job postings in Russia.
The leading analytics and data company noted that the job openings in Ukraine seem to have plateaued since October 2021. However, the new job postings have declined even further in February 2022 while job closures have risen. This could be a potential reaction to the situation in Ukraine, GlobalData indicated.
Ajay Thalluri, Business Fundamentals Analyst at GlobalData, commented:
“Hiring activity in Russia has declined as total job openings have seen a significant dip since December 2021. Technology companies have eased back on new job postings since November 2021 with these numbers declining by a further 60% in February 2022.
“The situation in Ukraine may impact hiring activity due to the ongoing political situation and potential economic instability. Job seekers in Ukraine and Russia could have fewer choices to pick employers until tensions subside.”
Ajay Thalluri, Business Fundamen
Economic impact of the Crisis
Commenting on the Russia-Ukraine crisis, Gargi Rao, Economic Research Analyst at GlobalData, indicated:
“If the US and its allies impose more rigorous sanctions on Russia, the Russian government’s ability to access financial markets will be hindered. Severe disruptions in trade, investment, and oil production and supply are on the cards, all alongside a blow to consumer sentiment. Against this backdrop, GlobalData forecasts that Russia’s economic growth will slow down from 4.6% in 2021 to 2.6% in 2022.”
Gargi Rao, Economic Research Analyst
As at February 24, 2022, the price of Brent crude oil inched closer to US$105 per barrel. With Russia being a top producer of natural gas, wholesale gas prices could continue to climb, which will further threaten heating bills and could have a knock-on effect on the prices of goods. Germany’s decision to halt the gas pipeline project connecting to Russia will likely push up gas prices in the EU.
As Russia is highly dependent on the US for imports of food and other products, the exchange rate between the Ruble and the US dollar could have a significant impact on the price of goods in Russia.
GlobalData expects the Ruble-$ exchange rate to depreciate from 73.6 Ruble/$ in 2021 to 75.7 Ruble/$ in 2022, with the US and allies vowing severe sanctions. Business and consumer sentiments will remain subdued, and prices are expected to remain at elevated levels in the coming months.
“With a weakening currency, Ukraine’s financial conditions have become tight and economic losses are expected to climb even further.”
Gargi Rao, Economic Research Analyst
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