Industrial activity – Stagnant for the last four months, optimism on the downfall

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Industrial activity’s level in June was approx. at the same level with the one in May, marking four months since it has ceased to increase, with the exception of exporters, a an Industrial Survey conducted by IRSOP and SNSPA reveals.
The survey shows that the output index has fallen from 62 in March, to 59 in May and 56 in June, yet being positive with values above 50. There is a downward trend, according to the variations in demand.
The fall in output leads to an excess production capacity which could influence the price for some products. When production decreases, the companies sell less and have to cut the price in order to keep the same level of sales.
The cashed in price index seems to confirm this assessment. The index has fallen from 54 in April to 47 in June.
Orders in June were at the same level with May.
The exporters seem to have a better evolution. The index for export orders has increased from 57 in May to 62 in June, however the top value was registered in April – 66.
The index of production costs remains high, 58 in June, up from 57 in May.
The companies’ confidence in the future is on a downward trend, most probably on the background of weak activities, except for exporters. In June the expectations regarding the output anticipated six months from now have fallen by 4 points against May, while expectations regarding new orders have fallen by 5 points.
Overall, the optimism in January regarding the future production has fallen to 60 in June. The lower expectations seem to be the most worrying signal the survey for June is trying to convey.
The survey was carried out during June 21-27 on 300 industrial companies, representative for the 15,200 industrial companies having more than nine employees in Romania, which generate about 95% of the total industrial turnover. The data were collected in interviews with company managers.

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