PRESS

Entrepreneurs’ confidence in industry’s development, drops
published in issue 3424 page 7 at 2005-05-10

by Paul Ciocoiu

Bucharest - The evolution of the industrial sector is not perceived very well by the firms which hold their activities in this field, according to the second industrial bulletin presented yesterday by the Applied Economy Group (GEA).

According to a survey conducted on 170 companies, the GEA index of industrial confidence went down in the second trimester to almost half, as compared to the first trimester of the year, i.e. from 14.5 to 7.4.

This index of industrial confidence takes into account the expectations regarding the evolution of the production’s volume, the present volume of orders and supply. The economists with GEA presented some explanations for this surprising decline, given the conditions of fiscal reform and the signing of the European accession Treaty, among which the evolution of the exchange rates of the national currency, the utilities’ price increase, the intensification of the competition on the market, as a result of the up-coming accession to the Joint Unique Market, but also the worsening of the foreign commercial deficit, which reached in Q 1 the record level of EUR 1.5 bln.

The majority of the survey’s respondents appreciated that the flat tax quota had a positive effect, while the difference between positive responses and negative responses is 55.3 per cent. The level of orders recorded a decline, from 4.3 months in the first trimester to 4.1 months. It also dropped the number of companies for which the orders covered a year of production, from 16.5 per cent in Q1 to 11.2 per cent in the Q2, while the number of the companies for which the orders cover maximum one month of production increased.

Concerning the profit registered in Q2, the industry operators seem to be optimistic, as they expect to pass this restructuring phase in a very short period. The 170 companies who answered the GEA poll identified an exchange rate which will ensure them a satisfactory profitability of 37,800 ROL/EUR, by 1,500 units over the present quotation. Approx. 60 per cent of the companies which indicated the ROL appreciation as a negative effect on the activity recorded a decline of the profit in Q1.

A R C H I V E  P R E S S   A R T I C L E S

PRESS - Industrial Bulletin no.1 / 2005
PRESS - Industrial Bulletin no.2 / 2005
PRESS - Industrial Bulletin no.3 / 2005
PRESS - Other press articles and interviews of GEA members