Global crisis hit Albanian manufacturers, ACIT report

TIRANA, June 21 – More than half of manufacturing businesses operating in Albania declared lower sales and profits in 2009, a recent study conducted by Albanian Center for International Trade (ACIT) has shown.
Some 57 percent of surveyed companies manufacturing for export said their sales registered a considerable drop in 2009 and in the first quarter of this year.
Falling demand in foreign markets, the increase in manufacturing costs and breach of contracts by foreign partners were the main factors contributing to the poor performance of manufacturing businesses in 2009.
ACIT said the survey was intentionally focused on the manufacturing sector, which is vital for the Albanian economy and exports with an estimated 80,000 employees.
Some 77 manufacturing businesses in the country’s three main cities of Tirana, Korca and Shkodra as well as 225 employees were interviewed.
However, the companies’ expectations for 2010 are better considering efforts to find new markets and improve the quality of products.
Manufacturing companies said government could help them by promoting their products in international markets, support them with loans and lower the tax burden.
The difficult situation of the manufacturing companies also affected the employees of this sector. Some 24 percent of the surveyed workers said their personal income had decreased by an average of 18 percent last year.
Employees also complained about the rising cost of living because of higher electricity, water and healthcare bills.
“Among measures that individuals took to handle the crisis were the decrease of daily expenses, buying on credit, borrowing from relatives and getting consumer loans,” said the report.
The Albanian Centre for International Trade (ACIT), an NGO specialized in foreign trade analysis, warned last month that that the decrease in exports by 8 percent last year shows Albania could be losing ground in the competitive advantage of the main exporting sectors such as shoes whose export fell by 5 percent.
Last year’s drop of exports was attributed to the global financial crisis and especially the situation in Italy and Greece where most Albanian products are exported.
USAID Mission Director in Albania, Joseph Williams, said the decrease in exports stresses the immediate need to improve the competitiveness of Albanian products in domestic and foreign markets.
Albania’s manufacturing industry has recently made a list of requests at a meeting with top government officials this week, complaining about delays in VAT reimbursement, payment of taxes on imported machinery as well as the social and health contribution system for employees.
Meanwhile, government has made available a 10 million euro fund to support businesses which can generate employment in a short-term period.