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Upsurge of industrial growth in September | TTonline

Upsurge of industrial growth in September

The industrial activity surged in September as compared with August after a flat 5-month period. The total production vo­­lume ratio increased from 56 in August to 63 in September, while new orders increased similarly from 56 to 63. These changes show that the rise in demand in the final summer months could be the main reason of this resurgence. It most likely relates to the export demand, since the export order ratio increased from 55 in August to 62 in September. However, a certain domestic demand increase could also be a factor.

Expansion bears on costs

For the first time in many months, companies are reporting a 3-point increase in costs as compared to July and August, and a 6-point increase from May and June. The production costs indicator increased from 61 to 64, while the raw materials and production materials indicator increased from 52 in August to 61 in September.

Concurrently, a slight decrease of inventories also became noticeable, from 49 in August to 46 in September.

Inventories continue to follow a downward trend (index below 50) due to a tendency by the companies towards an order-based resupply.

Prices and jobs remain constant

The sales price index remains stationary at 49 points, in downward territory. In the past 11 months, the price index followed an upward trend only once, when the production volume peaked to 63 points. 

For now, companies are not contemplating new hirings. On the contrary, the employment index dropped from 54 in August to 50 in September. A likely explanation would be the influence of seasonal work, which determines some companies to reduce staffing in winter months.

Expectations on the rise

The boost of current production also bears on future expectations. The 6-month production vo­lume climbed from 54 in August to 57 in September.

A global confidence indicator (the average of expectations for orders, production and sales prices) shows a slight confidence increase to 57 points, after a long slump from 71 in January to 54 in August this year.

The main question of the Barometer this month is whether the industrial activity will continue to increase, stop at the current level or decline. 

The report was prepared by IRSOP & SNSPA Faculty of Management on a sample of 301 industrial companies representative for the 15,200 industrial companies in Romania with more than 9 employees which are generating approximately 95% of the total industrial turnover. The data was collected by face to face interviews with company managers between 19 and 23 October 2015. The results can be viewed at www.snspa.ro/info-snspa/comunicate-de-presa.


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