Industrial production down 1.4% in July

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The production of the Romanian industry dropped 1.4% in July from the previous month, reveals data supplied by the National Statistics Institute (INS).
Yet compared to July 2007, industrial production advanced 5.1%; the same parameter climbed 5.8% over January – July 2008 compared to the similar period of the year before.
 
INS has recently published surveys of the evolution of prices for industrial products. Thus, according to INS, industrial production prices have picked up speed in July. At factory gate, products were by 20.34% more expensive than in the similar period of 2007, on the background of the massive price hikes in the processing industry. This is the most substantial price growth for industrial products this year.
 
Back to industrial production, the monthly setback was caused by the production fall in the processing industry (-2.8% in July compared to June). The other industrial segments: the extractive industry; electricity and heating energy, gas and water went up 4.3% and 14.3% respectively.
A declining trend in the processing industry had already been registered the month before (June compared to May).
Thus, industrial production slumped June to May because of the considerable decrease registered in the processing industry (-1.8%) electricity, heat, gas and water (-1.9%).
 
By large industrial groups, the capital goods industry witnessed the most substantial advance, of 14.7%; it was followed by the industry of durables with an advance of 9.7% compared to July 2007. In the industry of consumables production advanced 4.9%, followed by the industry of intermediary goods that inched up 1.8%, and the energy industry with 1.5%.
 
Expressed in year-on-year terms, July 2008 to July 2007, industrial production advanced 5.1%. This increase was supported by all three industrial sectors: the extractive industry (+8.4%), the processing industry (+4.8%) and electricity, heat gas and water (+ 4.2%). Similarly, by large industrial groups the growth was as follows: the industry of capital goods (+14.7%); durables industry (+ 9.7%); the consumables industry (+ 4.9%); the industry of intermediary goods (+1.8%) and the energy industry (+ 1.5%).
 
INS also presents this year’s Jan – July results, that reveal that production of the Romanian industry was by 5.8% higher than in the same interval of 2007. The advance was supported by the electricity, heat, gas and water that gained 6.5%, and by the processing industry that produced by 6.4% more. Yet there was a 0.8% decrease in the extractive industry in the same interval.
 
Despite the negative outcomes, economists trust the Romanian industry. “Alongside agriculture, the Romanian industry has a high growth potential. Although it could now display a poorer performance, I consider that investments in industry and agriculture will boost the turnover and production in these sectors. In the last year, foreign direct investments followed a sustained upward trend in agriculture and industry,” Lucian Anghel, head economist of Banca Comerciala Romana (BCR) told Business Standard daily.
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