According to the National Statistics Institute, Romania's industrial output grew by 7.4% in the first 9 months of the year.
According to information made public by the National Statistics Institute, in the first 9 months of this year Romania’s industrial output grew by 7.4% as compared to the corresponding period of last year. This was due to the 8.8% increase in the processing industry and the 0.6% growth of the extractive industry. On the other hand, the energy industry dropped by 3.6%. However, the increase in macroeconomic indicators does not reflect accordingly in a concrete improvement of living standards. Economic analyst Constantin Rudnitchi attempts an explanation:
“In the private sector, things are still not as good as we would like them to be or as the macroeconomic indicators show. In other words, this economic growth that we often talk about does not necessarily translate into a development of the private sector. Our economy is in a paradoxical situation, according to these figures, in the sense that there is more stability in the state-owned sector and it is in this sector that pay raises are more likely to be operated than in the private economy. This proves that what we call real economy still doesn’t work properly, macroeconomic growth is not to be found in the real economy, many sectors are still struggling, businesses are still affected, and either they fail to grow or they grow at a very slow pace, so entrepreneurs are rather wary of increasing the salaries of their employees. Although industry on the whole accounts for around 30% of Romania’s GDP, there are only several industrial sectors that report good performance indicators, and only several companies that manage to grow. These include primarily the companies that export their output and the companies that have major sale markets in the country, particularly the oil and natural gas industry, that is, the energy sector. These are well defined economic sectors, the overall economic growth is best reflected there, and this is where some pay raises may occur. The company growth may be transferred, even in part, to the employees. Unfortunately, this is not true for the Romanian economy as a whole, and this is why it is so hard for the macroeconomic growth to be seen in consumers’ living standards.”
In order to feel the pulse of the Romanian industry, we talked with representatives of several companies. For example, the Targu-Mures based Azomures, the country’s largest producer of chemical fertilizers, has ongoing investments of nearly 200 million euros. This would lead to a significant reduction in emissions of ammonia and powders, so that by the end of next year, all European environmental provisions will have been met. There are even more investments leading to increasing output and lessened energy consumption, claims Mihai Anitei, the head of the company:
“The urea factory will change completely, there will be very little left of it. We have more projects, and we have already started work on the water cleaning station. In five years time, if all goes well, we will have a new Azomures. Through these investments we will be substantially reducing emissions through technology, reaching the admitted limits. We will increase production capacity and reduce gas consumption. We will render the factory much more efficient.”
Oana Gusatu, representing Vulcan, a factory in Bucharest making industrial gear, told us how their business is going:
“The business goes well, we have clients all over Europe, we deliver to Arab countries, and even South America. Vulcan practically exports all over the world.”
Silviu Harabu, from Faur Bucharest, told us how their business is faring:
“In some areas business is going well, in others it has regressed, but we seek new avenues, because we are concentrated in heavy industry, at a time when industry has been doing not that well. We have built a lot of industrial equipment for the energy industry, especially hydro, and mostly for export. Exports are focused mostly on Europe, Germany, Austria, France, Switzerland. We don’t export much outside Europe. We have an older contract with Egypt, for locomotive parts, and we have also delivered hydropower parts to Turkey, but through an Austrian company.”
Economic analysts believe that 2014 is a year when agriculture could be as fruitful as in the previous year, but Romania’s economic growth relies mostly on industry and exports. Even though growth is expected to be less than last year, even 2 to 2.5% is considered a good rate of growth, considering the general drop in economic increase.
Translated by Ana Maria Popescu and Calin Cotoiu
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