Stagnation, no reason for concern

The slowdown of the industrial output in 2005 is no reason for concern, a study by the National Forecast Commission (CNP) shows, as this period was just a time of adjustment to the demand on the market as far as companies are concerned. Industrial output in 2005 registered only a slight growth, of merely 1.4% for the first ten months compared with the first ten months of 2004. At the same time, the turnover of the companies in the industry rose by 3.4%, twice and a half faster. Analysts say this trend was due to the increase in prices, in the sense that industrial producers reacted to the stagnation or even decline in output by upping prices. In other words, they took action to preserve their revenues and profit margins, despite limited output. The production stagnation is, however, offset by the increase in the revenues of the industrial companies. “The increase in turnover normally means companies resorted to secondary manufacturing operations and to stock reduction,” CNP”s chairman Ion Ghizdeanu told ZIARUL FINANCIAR. ZF