Weak industry in Romania, production costs strongly up last year, barometer reads

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The industry was weaker in the past three months of 2018 in Romania, reads the „Industry Barometer in Romania-December 2018. 2019 Perspectives”, conducted by IRSOP and the Management Faculty within the National University of Political Studies and Public Administration (SNSPA) and presented on Wednesday.

300 industrial companies have been surveyed.

The barometer says the domestic industry is growing in value, but the level of activity reported by managers has been slightly unchanged in the past 4 years (2015-2018).

The survey says that the activity has strongly contracted in December 2018, while the orders for export have moderately fluctuated from 59 to 50 points last year, while the annual rate has been down from 59 in 2015 to 54 in 2018. Raw materials imports showed a higher volatility in 2018 than the export orders and an annual declining trend during 2016-2018.

The industry workforce is fluctuating, while production costs have been highly up starting 2016. The money cashed by the companies have been also up, but not so much as the costs.

In the past three months of 2018 the industry was weaker than in the last three months of 2017.

Generally speaking, the managers’ expectations about future are falling down when the activity is declining and are brightening up at the start of the year. However, expectations have remained slightly unchanged from one year to another, which proves that the activity capping also prompts the expectation capping, from one year to another.

So, the history of weak investments, modest productivity and the economic slowdown in the Euro zone might enable a more vulnerable industry to shocks, limited increase and deepening trend of decrease in 2019.

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