BAG Index: Lack of Qualified Personnel Remains Main Challenge for Businesses

1 May '26

The Business Association of Georgia (BAG) has completed work on the BAG Index research, according to which the business climate indicator stood at 42.5 points in Q1 2026. Notably, the indicator improved by 10.8 points compared to the first quarter of the previous year; specifically, the assessment of the current situation increased by 15.3 points, while expectations for the next 6 months improved by 4.9 points.

In Q1, 55% of surveyed companies still named the shortage of specialists as their main challenge, although this problem eased by 10 percentage points compared to the previous quarter. Legal and administrative barriers, as well as the shortage of labor, also decreased by 14 and 13 percentage points, respectively.

It is worth noting that by sector, the shortage of specialists is felt most acutely in the construction and service sectors. For the construction and trade sectors, legal and administrative barriers, along with limited financial resources, also represent significant challenges.

59% of surveyed businesses reported factors hindering their operations, which is a reduced figure compared to both Q1 of the previous year and the preceding quarter.

In the first quarter of 2026, 65% of surveyed companies stated that the volume of their total investments would increase in 2026 compared to 2025.

Among sectors, the most optimistic expectations regarding investments in 2026 were recorded in the manufacturing/industry sector (81%). In the service and trade sectors, 61% of companies in each plan to increase total investments, while in the construction sector, the figure stands at 60%.

For context, the BAG Index is based on evaluations from members of the Business Association of Georgia and companies within their group. It is conducted by the Business Association of Georgia and the PMC Research Center using the methodology of the ifo Institute for Economic Research (Germany).

The full research report is available at the link