Construction sector decline deepens, industry sends positive signals

Whilst the industry remains on the rise, and has prospects to grow further, the construction sector, which used to be one of the economy drivers in the years of economic boom, continues its freefall as no new construction sites are being opened.
With a single working engine – industry, which caters to foreign demand – the economy does not stand any chance of recovering in 2010. The tough adjustment measures adopted by the government by cutting public sector employees’ salaries and by raising the VAT are dealing a major blow to consumption, with companies no longer finding markets for their products and services in the absence of investments. Meanwhile bankers continue to charge high interest rates on loans for the population although no new clients are coming their way. If consumption is not encouraged, the economy will not recover.
The construction sector is not showing signs of recovery, having remained in negative territory. The volume of construction works fell in May against May 2009, both as gross series, and as seasonally adjusted series, by 20.9%, and 17.3% respectively.
There are, however, also positive signals coming from industry and exports. The latest data show that the turnover and the new orders in the industrial sector rose by 14.4% in May, and by 22.5% respectively, against the similar period of last year. Turnover in the industrial sector rose on the back of a 15% increase for the manufacturing industry, while the extractive industry slipped by 0.2%, according to data from the National Statistics Institute.