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IRSOP barometer: industry managers expect a slowdown in six months
The overall confidence index went down from 64 points in February to 62 in March and 60 in April, and industry managers expect a slowdown in six months, according to a barometer poll of the IRSOP research company and of the Management Faculty of the SNSPA National School of Political Science and Public Administration.
"The situation in industry changed quite suddenly. There was a boost moment in March; in April, however, the activity slowed down. The production volume dropped from 69 points in march to 61 in April, just four points above the 57 points average of the past 18 months. Despite the quick drop, the industry stays in an expansion area (over 50 points)," the study says.
Researchers say the backlash was caused by the sharp contraction of domestic and foreign demand. New orders decreased even more than the volume, from 68 points in March to 58 in April, while exports went down from 61 to 58 points, and stocks slightly decreased from 50 to 48 points, which means exits began to exceed the entries.
The volume of unanswered orders has advanced from 49 to 53 points, which could reveal a deficit of capacity. Sudden fluctuations of demand also have an impact on jobs, and companies started layoffs; the hiring index dropped from 56 points in March to 50 in April, while production costs kept their uptrend, from 56 to 59 points. Also, raw material imports and capital expenditure have increased.
According to the study, imports seem to owe to the private domestic consumption, or to slightly higher private investments, while capital expenditure might indicate a wish of taking advantage of the overall growth to hedge against continued instability.
The IRSOP/SNSPA barometer used a sample of 328 companies, representative for Romania's 15,200 industry firms with more than nine employees, generating some 95 per cent of the industry turnover. Data was collected by direct interviews with manager from 19 to 23 May.