Wage arrears in Russia have exceeded eight billion roubles (US$230 million) for the first time in three years after rising 16% in February alone.

The unpaid wages indicate that firms are struggling to attract new funding and are finding it difficult to stimulate demand for their products and services.

Wage arrears sparked much of the public protest during the country’s last economic crisis in 1998. Back then, arrears reached US$3.8 billion as firms began to pay workers in goods, rather than cash.

Some 93.4% of the current arrears are due to firms being low on cash, while the remaining arrears have been caused by firms filing to receive federal, local or regional support on time.

In terms of the industries most effected, the Russian statistics service stated, “in the total volume of wage arrears, 47% comes from the manufacturing sector, 16% from transport, 13% from construction and 8% from agriculture.”

Some 41.4% of these arrears date back from 2008 and 8.4% have been owed even longer.

Meanwhile, industrial production in Russia fell 13.2% on a year-on-year basis during February, which is the fastest fall in seven years.