The Konfindustria report shows a slowdown in industry branches such as the basic food producers, alcoholic and non-alcoholic beverages, and industrial sectors related to the construction
TIRANA, Oct. 24 – Industrial production during the first nine months of this year has been at a standstill with the main industries still continuing to suffer from liquidity problems. The findings are revealed in the latest report published by the Albanian Konfindustria Association which makes a comparison of the performance of this sector to the first three quarters of 2010. The report measuring sales and profits in the industry sector, which accounted for 11 percent of the GDP in 2010, shows a reinvigoration in exporting branches such as the garment and footwear industries, accounting for the top Albanian exports. The improved situation in this sector is a result of increased demand in international markets following lower production from North African countries which were swept by a wave of political turmoil. This is also proved by the latest data published by the country’s Institute of Statistics INSTAT showing the exports list in January-August 2011 was topped by “textile and footwear products” which rose by 18 percent year-on-year reaching 43.4 billion lek. However, the situation in other industry branches such as the basic food producers, alcoholic and non-alcoholic beverages, and industrial sectors related to the construction suffered a deterioration in either the sales or profit indicators. In the basic food production industry, the flour meat and milk processing industries showed stability in their sales indicators but a deterioration in their profits. The depreciation of the Albanian national currency, lek, against the US dollar and the Euro, and the increase in raw material such as grains and meat in international markets were the main reasons, says the report. In the non-basic products industry, alcoholic, non-alcoholic beverage producers as well as beer and canned food producers suffered a deterioration in both sales and profits. Industrial sectors related to the construction sector such as the mechanics, the iron, tin processing, brick and roof tiles, furniture, plastic and paper production continued performing under the 2010 levels, which were far worse compared to the 2008-2009 period. Konfindustria reports that in many cases the performance of these industries related to the construction sector, in crisis since 2008, is a result of delays in payments for new orders. Heavy industry sectors such as the production of electricity, oil, minerals and steel continued having stable sale and profit rates mainly because of demand from international markets remaining at high levels. Findings from the latest Bank of Albania survey show confidence in the industry sector registered a slight 1.2 percent increase but remains 1.7 percentage points below its long-term average. Industrial production was the only indicator contributing to the improvement in the confidence of this sector while the inventory and employment situation continued to deteriorate. Problems with power supply, corruption, informal economy, law and order and the tense domestic political climate are reported to have negatively contributed to the activity of industry businesses in the third quarter of 2011. The negative impact from the legal framework and its implementation continued deteriorating. For the final quarter of 2011 industry businesses are more optimistic with overall situation of businesses expected to improve. They also expect an increase in domestic and external demand, production and employment and a drop in inventories.
