Further growth of vehicle production in the Czech Republic is being hindered by labour shortages, reports Reuters. The president of the country's automotive trade body, AutoSAP, Martin Jahn, was quoted by the news service as saying, "The biggest barrier we are facing is a lack of qualified and unqualified workers." The trade body said that industry in the Czech Republic requires an additional 52,000 workers. Jahn added that the country needed to do more to make it easier to bring in foreign workers and retrain Czech workers "to do everything so that we do not have to limit production".
Significance: The automotive industry in the Czech Republic is booming at the moment and employs around 115,000 people. IHS Automotive data show that the country's recorded light-vehicle output reached record a level of 1.23 million units during 2015. This has been driven by Skoda's factories in the country, as well as sites run by Hyundai and a joint venture (JV) between Toyota and Groupe PSA. We see further moderate production gains to almost 1.3 million units during 2016, so labour shortages seem to be not much of an issue up to now. Nevertheless, the fear seems to be that it could prevent further expansion of the sector. There is some evidence of little flexibility in the market, with unemployment levels currently falling to 5.0% this year and expected by IHS to reach 4.2% during 2016. Furthermore, the report adds that job vacancies in April hit 124,000 in the country. It remains to be seen whether the government chooses to take steps to reduce this constraint, particularly with the opportunity to leverage the influx of refugees from the Middle East of late.
