Industrial barometer: the results of August 2016 – the drop was worse

The activity in industry continues to drop is the result of the Industrial Barometer made by IRSOP&SNSPA the Faculty for Management. In August, the indicator for the volume of production dropped 51 points against 57 in July and is now under the average of the last 22 months (56 points). The descending trend started in March when the indicator had 69 points and did not give any signs of coming back. For the moment, the value of the indicator is only one point over the threshold of 50 which separates growth from contraction.

Together with the volume of production there you could notice the drop in some vital indicators which show that industry has no sufficient force to profit from the national economy growth and to resist the global economic turmoil.

New demands dropped from 55 in July to 50 in August, and at the same time we see a contraction of the stocks from 49 to 42 points. Practically, the rhythm in which the stocks are emptied is higher than the rhythm of new demands.

The data suggest the apparition of significant gaps in the activity of export and import. The indicator for demands to export dropped in August at 46 points ( in the area of contraction) and that of import was reduced from 62 to 53 in August staying in the area of growth. The discrepancy between the two indicators illustrates the commercial deficit and at the level of the rate between the industrial goods exported and the imported raw material.

Finally, the indicator for non-executed orders dropped from 49 in July to 43 in August, as the lack of new demands leads to the sub-utilisation of the industrial capacities.

The decrease in the key indicators for industrial activity is much too drastic to be explained by the season of holidays.

The trust of managers in the future is low. The synthetic indicator of hope in the future activity is at 54 points with 14 points under the maximum of the current year (68) and 6 points under the average of the last 22 months (60). The value of the indicator represents the average of expectations regarding he rate of new orders, the volume of the production and the prices over 6 months.

Expectations are a projection of the present difficulties. If the situation is deteriorating, the managers expect that it will go on to deteriorate. Inevitably optimism is going down.

Technical details

• Monthly barometer with the daily situation in industry

• Shows the activity in industry in August 2016

• Is available almost 20 days since the end of the month under analysis

• Made by IRSOP&CSNSPA the Faculty of Management on a sampleof 300 industrial companies, representative at the level of the 15,200 industrial companies with over 9 employees inRomania which generate almost 95% of the total of the industry turnover.

• Data collected through direct interviews with the managers of the companies between 15-20 August 2016

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