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Industrial barometer: Industry recovered in February after 4 months of decline


According to Industrial Barometer, made by IRSOP&SNSPA, industry recovered in February, after four months of decline.

* Output volume grew for the first time after 4 months of decline. For 60 days, in December and January, activity in industry was in contraction, reaching the lowest level in the last 28 months (35 points). In February, activity grew to 53 points and industry got into the lowest level of expansion area (over 50 points).

* New orders grew but are now under the average of the last 28 months.

* Orders not carries out show a slight drop in February, but fluctuation is insignificant because for 8 out of 10 companies the volume of orders not carried out are in balance. Balance means that demand is at the level of execution capacities.

* Delivery time from suppliers remained constant.

* The number of employees grew a little in February, compared to January. But the percentage of companies which hired was equal to that of companies which fired employees.

* Stocks remained in the contraction area, under 50%. New orders and production volume has not succeed in filling company stocks.

* Orders for export grew in February reaching the highest level of the last 4 months.

* Raw material imports went up again with the increase of domestic and foreign demands.

* Capital expenses were at the lowest level of the last 28 months in January and February. The drop and stagnation of expenses for new facilities, equipment and other active stock which can lead to economic growth show a low level of managers’ confidence.

* Production costs grew for three months on a row, since December to February and are now over the average of costs in the last 28 months. The extensive cost increase sends inflation signals.

* Prices received by companies grew in February against January and the 2015-2016 price average, but the increase was lower than the advance of production costs, which may affect company profit.

* The managers’ expectations for the next 6 months slowed down. In February, it was the first time in 8 months when the optimism indicator, calculated as average of cumulated hope for demand, production and incomes, stopped growing and dropped by a point against January.

In conclusion, industry seems to have recovered in February, recording increases to 60% of indicators measured by the Barometer. But for the time being, neither intensity, nor directions of February changes suggest a durable increase.