Sergei Tsukhlo, Head of the Gaidar Institute's Business Surveys Laboratory, told RBC how the ruble exchange rate affected the state of the Russian industry.

According to the enterprises' view, the weak ruble has become one of the strongest constraints for the industrial growth. The adverse effect of the weakening currency and, as a result, the rising cost of imported equipment is considered an issue by 35% of executives in the October business survey conducted by the Gaidar Institute. This share became the highest since January 2016.

In October 2022, only 6% of respondents believed the weak ruble to be a constraint. The previous peak value (36% of responses) was recorded in early 2016, when the dollar exchange rate exceeded Rb75 for the first time. As of the beginning of Q4 2023, the ruble was ranked 4th among the issues for industrial growth most frequently cited by businesses.

The first place among the constraints (in terms of the number of responses) was staff shortage - it was indicated by 57% of respondents. This issue has become the most widespread for the first time since the onset of the sanctions crisis. Before that, since the beginning of 2022, the industrialists were most often concerned about "the uncertainty of the current economic situation and its prospects". At present this factor was in the 2nd place, it was noted by 43% of respondents. The third is domestic effective demand: 38% of respondents are concerned about it.

Business surveys to assess the dynamics of industrial growth constraints have been conducted by the Gaidar Institute every quarter since April 1993. The number of factors in the relevant question has been increasing - there are currently 19 of them, Sergei Tsukhlo explained to RBC. The influence of the ruble exchange rate, both its depreciation and appreciation, has been included in the number of factors since April 2014.

According to the surveys, 82% of businesses need the ruble to appreciate in order to cut costs. Two thirds of respondents need it to increase investments and the same number of respondents need it to boost domestic demand. Sergei Tsukhlo explained that the industrial sector remains dependent on expensive imported components. This being said, consumers have a desire to stock up on imports that are rising in price and fading away to the detriment of purchasing Russian products.

Since the beginning of July 2023, the dollar/ruble exchange rate has not fallen below Rb90 and has exceeded Rb100 several times. The increase of the key rate by the Bank of Russia to 13% indicates growing inflation risks. The rise in the key rate causes an increase in interest on loans and reduces their availability for industrial enterprises, said Sergei Tsukhlo. However, only 1% of businesses mentioned the lack of loans as a constraint to industrial growth.

As of the beginning of Q4, the results of surveys allow us to say that an acute shortage of employees has formed in the Russian industry in 2023. Among the industries, the biggest shortage is in the light industry: 80% of enterprises noted insufficient number of personnel. According to Sergei Tsukhlo, this may be due to the low level of automation in this industry and the need for a large number of workers.

Responding to questions about the level of employment, directors of enterprises also noted the most frequent reasons for employee dismissals. In 2023, the number of dismissals "due to moving to another region" increased sharply. As of October this year, this was the most frequent reason: it was noted by 59% of respondents. A year ago, industrialists most often noted the item "for formal reasons", which include conscription, trial, death (at the end of September, the country announced partial mobilization), among others.