First positive sign: Industry decline slows down

Industrial output in September went down at a visibly slower pace from a year ago, to 4%, after having declined at a pace of 18% in the early 2009.

At the same time, retail in September posted a 13.9% annualised decrease from the June low of -17.3%, according to INS (National Statistics Institute) adjusted data. The fall came amid the 21% decline in car fuel retail and the 10% lower sales of non-food products. Sales of foods products, beverages and tobacco shrank by 7.9%. Governor Mugur Isarescu during his last Friday speech forecast INS would publish better data pertaining to the September progression of industrial output, which he optimistically placed on a "slightly positive trend". "It was the first half that was catastrophic. We hope a positive trend gains momentum and the next sign pointing to the progression of economy should not be World Wide Web (www, namely repeated ups and downs i.e.)," says Florin Pogonaru, chairman of the Business People's Association of Romania (AOAR).

The trade deficit in the first few months of the year stood at 6.9bn euros, down 11bn euros from the same period of last year, in the context where imports declined at a twice faster pace than exports.

"A rebound is out of the question. In our field (that of textiles i.e.), economic operators are, on the contrary, highly wary about these last months of the year, September, October, November. Next year, a physical output increase may come on a consumption rally in Western markets, but not on the domestic market," says Maria Grapini, general manager of Pasmatex group of Timisoara.

In the first nine months of the year, output dropped by 8.5% from the same period of last year, after in the first eight months the decline had reached 9.2%, taking into account the adjusted data published by the INS. "This is an improvement. Emotionally, when one gets from a 45% turnover decline in the first half to a 20% drop in the second half and when this September starts resembling last September, one's undoubtedly happy. It was the first half that was catastrophic," Florin Pogonaru says.

Along major industrial categories, September brought annualised declines of 11.5% in the durable goods industry, of 10% in the current use goods industry, of 4% in the intermediary goods industry and of 2% in the capital goods industry. The energy industry grew by 3.7%.

"Consumption exuberance will go down. We'll see sales in traditional stores drop, with people shifting to discount retailers," Pogonaru says.