HUMAN CAPITAL OF PLOVDIV

Population

Labor Supply

Wages in Manufacturing

Education System

This revision: May 8, 2019

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Population in the city of Plovdiv is marking steady growth since 2012, reaching 347 000 people in 2018. Almost two-thirds of them are aged 20-64 years. With its strategic location and good transport connectivity, the city and its industrial zones are accessible in less than 45 minutes by additional 428 000 people. More than half of them are in working age.

Source: NSI, 2018

POPULATION

PLOVDIV

30 min. from

Downtown

535 000

775 000distance 45 min.

Haskovo+Dimitrovgrad134 000

60 min.

Stara Zagora157 000

60 min.

Sofia1 330 000

60 min.

POPULATION STRUCTURE IN WIDER PLOVDIV REGION (distance 45 min.)

POPULATION IN WIDER PLOVDIV(distance 45 min.)

AGE UNDER 20 20 – 44 45 – 64 65 – 74 75 +

NUMBER 151,000 251,000 212,000 91,000 70,000

SHARE OF TOTAL

20% 32% 27% 12% 9%

POPULATION IN WORKING AGE IN WIDER PLOVDIV REGION

50% 50%

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In recent years, the demographic replacement rate (ratio of persons entering working age to persons leaving working age) in Plovdiv district is on the rise. In 2018 it reached 67.8%, which is one of the highest in the country.

High quality of life and a myriad of possibilities for career development attract constantly new citizens. For the last 7 years, both the city and the district see a positive net migration – newcomers

outnumber leavers - while nation-wide figures are negative. Plovdiv is particularly attractive for high-school and university students, as well as for young professionals, with high positive net migration rate in the age group 10-29 years. The number of expats and Bulgarians returning from abroad grows steadily and since 2017 Plovdiv district sees a positive net migration vis-à-vis other countries.

1 000 FROM SOFIA

2 300 FROM CLOSEST DISTRICTS

7 500 NEW INHABITANTS

FROM OTHER DISTRICTS

2 000 FROM ABROAD

13 165 NEW INHABITANTS

IN 2018 (district)

High quality of life and a myriad of possibilities for career development attract constantly new citizens

+6.7‰ NET RATE

20-29 YEARS (district)

+2 300 NET ANNUAL

CHANGE (city)

Newcomers outnumber leavers

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Plovdiv district has a robust labor market that continues to expand in recent years. Just in 2017, its labor market marked growth with 37 000 people – more than any other region in the country. As of 2018, its labor force consists of over 310 000 people.

In terms of employment, Plovdiv has a strong industrial profile. There are approximately 75 000 jobs in the manufacturing sector, which constitute 1/3 of all employed in Plovdiv district. Plovdiv is also the region with most people working in manufacturing companies in Bulgaria.

Vibrant medium-technology cluster has formed in the industrial zones around Plovdiv, employing more than half of the local industrial workers. This includes many auto suppliers, as well as other producers of machinery, metal, electrical and plastics products. The labor force is specialized but nevertheless readily adaptable to the demands of the automotive producers and suppliers.

LABOR SUPPLY

FABRICATED METAL PRODUCTS 11 000

ELECTRICAL EQUIPMENT 6 400

RUBBER & PLASTICS 6 100

MACHINERY & EQUIPMENT 5 400

CHEMICAL PRODUCTS 2 700

BASIC METALS 2 300

GLASS & MINERAL PRODUCTS 2 000

REPAIR & INSTALLATION OF MACHINERY 1 700

TRANSPORT EQUIPMENT 1 600

EMPLOYMENT IN MEDIUM-TECH SECTORS

Source: NSI, 2017

+ 1 500 IN HIGH-TECH PRODUCTION OF

COMPUTER, OPTICS & ELECTRONICS

+2 400 FABRICATED METAL PRODUCTS

+2 600 ELECTRICAL EQUIPMENT

Change in number of jobs for 5

years

+1 000 MACHINERY & EQUIPMENT

+800 RUBBER & PLASTICS

Source: NSI, 2012-2017

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Automotive producers that choose Plovdiv as their investment destination have also access to human capital, consisting of well-prepared workers from other sectors of the economy, with lower added value and labor productivity. The average productivity (value added per employee) in the medium-tech cluster is €17 400, compared to €12 400 in low-tech sectors and €10 700 in non-manufacturing. Despite high activity rate and low unemployment, automotive companies will manage to attract human capital from the wider Plovdiv area and other districts, as well as to mobilize economically inactive population.

NON-MANUFACTURING EMPLOYMENT 145 000

ECONOMICALLY INACTIVE (15-64 YEARS) 115 000

FREELANCERS & SEASONAL WORKERS 96 000

LOW-TECH MANUFACTURING EMPLOYMENT 35 000

UNEMPLOYED (15-64 YEARS) 15 000

OPPORTUNITIES FOR ATTRACTING HUMAN CAPITAL

Source: NSI, 2017

€12 400 LOW-TECH MANUFACTURING

€17 600 MID- & HI-TECH MANUFACTURING

AVERAGE PRODUCTIVITY

(value added per employee) €10 700

IN NON-MANUFACTURING

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45.6%Low-tech

Medium-high-tech 21.4%

Structure of industry by level of technology (% in manufacturing employment)

High-tech 2.0%

Medium-low-tech 30.6%

Plovdiv district has a well-developed medium-tech cluster of companies, including automotive suppliers, producers of electrical and electronic equipment, rubber, plastics and metal products and machine building companies

52% OF THE OUTPUT IN THE

MANUFACTURING SECTOR IN 2017

+8 200 CHANGE IN NUMBER OF

JOBS FOR 5 YEARS

€17 441 VALUE ADDED PER EMPLOYEE IN 2017

11% ANNUAL GROWTH OF GVA PER EMPLOYEE

The industry is shifting towards sectors, that require the utilization of the latest technology & IT trends

Source: Trakia Tech based on NSI (data on district level for 2012-2017)

MEDIUM TECHNOLOGY SECTORS IN

PLOVDIV DISTRICT

Medium technology sectors in Plovdiv district

Source: Trakia Tech based on NSI (data on district level for 2017)

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Number of industry-compatible employees

35 929 MACHINE OPERATORS

27 442 SKILLED INDUSTRIAL

WORKERS

18 420 TECHNICIANS

+34 000 GROWTH OF WORKFORCE

IN 2017

70.1% EMPLOYMENT RATE

(15-64 years) EU average: 67.7%

Мore than any other region in the

country

220 592

43,279

9,339

10,677

33,203

48,733

75,361

43 279Public services & regulated markets

Consumer services 33 203

District with most people working in the manufacturing

+ 96 000 freelancers & seasonal workers

Manufacturing 75 361

Local economy structure (by employment)

Construction 10 677

Others 9 339

Business services 48 733

Source: Trakia Tech based on NSI (data on district level for 2017)

Source: NSI (data on district level for 2017)

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Manufacturing labor costs in Bulgaria are still the lowest in the EU, being between two and three times lower than those in the Visegrad Group, as well as with 1/3 lower than those in neighboring Romania.

Wages in manufacturing, both in Plovdiv district and in the country on average, typically have a slightly higher growth rate than the average. Even though Plovdiv has one of the highest wage growth rates in manufacturing, wages in absolute terms are still lower than those in Sofia, Varna, Burgas and Stara Zagora.

Wage growth is preceded by productivity gains in the manufacturing sector. The growth of labor productivity in Plovdiv district outpaces increases in wages. Due to significant capital investments, process optimization and employee training, labor productivity in mid-tech companies has increased with almost 70% for the 2012-2017 period.

Bulgaria

Romania

Poland

Hungary

Slovakia

Czech Republic

EU

0% 3,333% 6,667% 10,000%

100.0

42.4

42.1

35.9

31.9

21.2

15.5

LABOR COST IN MANUFACTURING (EU = INDEX 100)

Source: Eurostat, 2016

BG (on average)

Plovdiv

Stara Zagora

Burgas

Varna

Sofia

8,000% 10,000% 12,000% 14,000%

134.1

114.0

111.2

109.6

101.4

100.0

GROSS WAGES IN MANUFACTURING (BG on average = INDEX 100)

Source: NSI, 2017

MID-TECH INDUSTRIES

11% ANNUAL

GROWTH OF GVA PER EMPLOYEE

9% ANNUAL

GROWTH OF WAGES

Source: NSI, 2012-2017

WAGES IN MANUFACTURING

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Hiring labor for mid-tech industries is generally higher than employing a worker in the low-tech sectors. The competitive salaries create opportunities for attracting and re-qualifying workers from such low-tech sectors as apparel and food production, as well as from other non-manufacturing sectors like trade and construction.

LABOR COST LEVELS BY SECTORS IN PLOVDIV (MID-TECH = INDEX 100)

Source: NSI, 2017

0%1,667%3,333%5,000%6,667%8,333%

10,000%

1008377

Low-tech manufacturing

Mid-tech manufacturing

Non-manufacturing

*€1534 is the maximum insurance base on which social security contributions are due

Total labor cost includes gross wage plus 18.9% mandatory social security contributions paid by employer

GROSS WAGES IN MANUFACTURING IN PLOVDIV, €/MONTH (2020 FORECAST)

ENTRY LEVEL

SKILLED WORKERS

PRODUCTION ASSEMBLY WORKER 530 690

CNC MACHINE OPERATORS 600 860

ENGINEERS - INDUSTRIAL MACHINES AND SYSTEMS 800 1140

ELECTRICAL ENGINEERS 750 1060

ENGINEERS – CONSTRUCTORS 800 1230

FIRST-LINE MANAGERS, SUPERVISORS, TECHNICIANS 840 1150

WELDERS, LATHE AND METAL WORKERS 710 1130

Source: Trakia Tech on the basis of survey of net pay among employers

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GROSS WAGES IN IT&BPO IN PLOVDIV, €/MONTH (2020 FORECAST)

Source: Trakia Tech survey

IT COMPANIES ENTRY & JUNIOR LEVEL EXPERIENCED

QA manual 660-1190 1 580-2 030

QA automated 790-1320 1 920-2 370

Developers 990-1690 1 920-2 830

Web content publishers & CMS administrators 530-790 990-1450

Graphic designers - pre-press 530-790 1050-1450

Graphic designers - creative 660-990 1190-1580

System administrators 660-990 1450-1800

CALL-CENTERS & SHARED-SERVICES CENTERS

JUNIOR LEVEL EXPERIENCED

Customer support representatives 590-730 860-1190

Sales specialists 730-790 860-1190

Office managers & assistants 660-730 860-990

Finance & accounting 730-920 1120-1450

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EDUCATION SYSTEM

36 GENERAL HIGH

SCHOOLS 10 847 STUDENTS IN LANGUAGE &

GENERAL HIGH SCHOOLS

29 VOCATIONAL HIGH

SCHOOLS

7 LANGUAGE HIGH

SCHOOLS

41 549 STUDENTS

9 UNIVESITIES

80 VOCATIONAL

EDUCATION CENTERS

12 315 STUDENTS IN

VOCATIONAL HIGH SCHOOLS

Source: Plovdiv Municipality based on data from universities, NSI, NAVET, data on district level for 2018

3000 FOREIGN

STUDENTS

12 000OVER 4000+

STUDENTS IN TECHNICAL

STUDIES

Students in vocational high schools

Source: Plovdiv Municipality 2018/2019

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Major fields by number of enrolled students

Business Services 7,652

Engeneering and technical studies 5,402

Food technologies and Agricultural studies 4,900

Natural Sciences 1,896

Source: Plovdiv Municipality based on data from universities, data on district level for 2018

2005 VOCATIONAL HIGH

SCHOOL GRADUATES

2328 GENERAL HIGH

SCHOOL GRADUATES

7641 UNIVERSITY GRADUATES

Top 5 biggest universities in Plovdiv

UNIVERSITYNUMBER OF STUDENTS

MAJOR FIELDS

Plovdiv University 25211Informatics and Computer Science; Business services; Language studies

Medical University of Plovdiv 5311Medicine and dental medicine; Healthcare

Agricultural University Plovdiv 4324 Agronomy; Plant protection

University of food technologies 2867Food and beverages technologies; Machine building

Technical University Sofia - branch Plovdiv 2019

Electronics and Automation; Mechanical Engineering

Source: Plovdiv Municipality based on data from universities, data on district level for 2018

Source: NSI, data on district level for 2017

ELECTRICIANELECTRONICS TECHNICIAN

MECHANICAL TECHNICIAN

COMPUTER SYSTEMS

TECHNICIAN

Fastest growing technical studies in high schools:

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University students in technical studies

Information Technologies 1975

Communication & Computer Technologies 849

Mechanical Engineering 843

Еlectrical Еngineering, Electronics & Automation 678

General Engineering 553

Transport, Navigation & Aviation 260

Energy Studies 244

TOTAL NUMBER OF STUDENTS

Source: Plovdiv Municipality based on data from universities, data on district level for 2018