Due to recent increases in wages, several productions are relocating to more cost-effective destinations. Bulgaria is no longer seen as Europe’s low-wage hub, according to Georgi Parvanov, a member of the Management Board of the Bulgarian Employment Confederation. He highlighted that this shift has led to the closure of several manufacturing plants in places like Vratsa and Pleven, with more than 5,000 jobs expected to be lost by the start of the new year. This change is attributed to the rise in wages, which many businesses in low-wage sectors, such as textiles and auto parts, cannot sustain. Parvanov expects that in the next 1-2 years, these sectors will move abroad, while production with higher added value will take their place.

The ongoing labor shortage in Bulgaria remains a significant challenge, especially for positions that require lower skill levels or technical expertise, such as forklift drivers, welders, and engineers. In particular, there continues to be a shortage of medical and educational personnel, despite the fact that the National Statistical Institute has reported a nearly 19% increase in salaries for educators this year. Parvanov warned that a type of "mini recession" is emerging, where some industries thrive while others face hardships.

The political instability in Bulgaria is another contributing factor, with certain industries seeking to leave the country due to concerns about the business environment. Furthermore, the reliance on workers from third countries has increased, with between 30,000 and 40,000 foreign workers employed in Bulgaria in 2024. This number is expected to rise to 50,000 next year. Parvanov emphasized that these workers fill roles that Bulgarians are either unwilling or unable to perform. He dismissed the notion that employers hire foreign labor to reduce costs, asserting that these workers are essential to filling crucial job gaps.

Sources:

• Bulgarian National Radio (BNR)
• econ.bg