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SNSPS & IRSOP barometer: În November, activity in industry on brink of contraction
In November, industry entered the third month of continuous activity drop and reached zero increase point, but contraction at the end of the year is customary in Romanian industry. However in 2019 the anemia is more pronounced than in the last two years, according to results of the industrial barometer made by SNSPA and IRSOP.
According to the analysis, the pattern says depression might continue until end of January 2020.
Managers do not seem to be worried by the slow rate and hope it will be better in 6 months time. Three factors probably explain the managers' optimism: political change, the beginning of a new year and their getting accustomed to the decrease of activity at the end of the year.
According to the study, production volume dropped from 50 to 57 in October, when contraction starts at under 50. Stocks remained at 46 points in contraction.
New orders also dropped from 58 in October to 53 in November, but compressed less than production volume, maybe because of a slight invigoration of exports. Orders for export show a slight growth from 50 in September to 52 in October and 54 in November.
According to the source, raw material imports dropped by a point compared to the previous month (56 against 57). Stagnation of raw material imports shows that managers do not expect important order flows for imports and exports in the months ahead.
The number of employees has been in the contraction zone for the last 8 months and at the same score of 48 points in the last three months. Managers are not considering hiring personnel at the end of the year, which means incomes received by the state from taxes will remain the same.
Production costs went up from 67 in October to 69 in November. It is the highest level in the last 8 months.
The global confidence indicator of managers in industry economic health in 6 months went up from 61 points in October to 64 in November.
The monthly barometer in industry is made by IRSOP and SNSPA on a sample of 300 industrial companies, representative at the level of 15,200 industrial firms with over 9 employees in Romania, which generate about 95% of the business figure in industry.
Data were collected by direct interviews with company managers, over December 12-18, 2019.