RSS
Industrial Barometer for August 2017: Shy industrial recovery based on domestic orders
According to the Romanian Industry Barometer, made by IRSOP& SNSPA- Management Faculty in August, industry recovered a little after two months of consecutive dropping (June and July). Small recovery signs can be seen for 6 out of 11 activity indicators. But increases are too weak to predict the beginning of sustainable expansion.
Every month, IRSOP and SNSPA interview a sample of managers if output, orders, stocks, employment and other parameters have grown compared to the previous month. An index based on the net ratio between answers points out expansion if it exceeds 50 points and contraction if it drops below 50.
Output
* New orders went up from 53 points in July to 55 in August. The increase is weak and seems to be based on domestic demand rather than export.
* Orders for export dropped in August to 46 points, below July score (48). It is the first time when foreign orders contract for two months on a row (July and August).
* Raw material imports continued to drop from 66 points in May to 56 in July and 53 in August, mostly on the background of reduced export orders.
Labour force
* Production costs went up from 58 points in July to 63 8n August. The increase seems more vigorous than production volume increase. Perhaps cost increase comes not only from production growth but from higher prices for some raw materials.
* Sums received by companies for products sold is 57 points against 56 in July, when 77% if companies report the same prices. There is asymmetry between production cost increases and the immobility of sales prices.
Investments
* Capital expenses remain at the limit between growth and contraction (52 in August and 51 in July). Practically speaking, in the field of investments from company funds there has not been any invigoration for 34 months.
Expectations
* The optimism index dropped a little in August (60 points compared to 61 in July and 59 in June), a sign that the small August recovery did not succeed to feed the positive hopes of companies. The index is made of separate expectations on demand, production and future incomes. A detailed look shows that the only field in which managers expect significant changes is production cost. The impression that in the next 6 months production costs will be higher grew from 63 points in July to 69 in August. This indicator will have to be studied attentively in future measurements.