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Electronics Production | May 23, 2008

Romanian economy to suffer<br>from rising labour costs

With a shrinking population, companies find it difficult to find qualified employees. Additional to that, rising costs will most strongly affect companies with production operations in Romania.
As the number of employees that are willing to work in a production environment decreases, employers are forced to compete stronger. "Industries that require lot of people are dying," says Florin Tataru, national HR manager with Vel Pitar. Tataru believes that the domestic Romanian market will follow soon be part of the downward trend that has affected the West. "There will be exits from the Romanian market. What's happened with Nokia in Germany will happen with other companies in Romania, as well".

The Romanian economy can handle this particular problem by either investing in technological advancement or focus on industries with a higher added value, such as IT, rather than production.

Paul Pacuraru, Romanian labour minister, says that most sectors are affected by this shortage. However, he believes that Romania has yet not reached the bottom of this development.

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