Export behind growth of industrial production in the fourth quarter

In the fourth quarter of last year industrial production in the processing industry increased by 3.0% according to seasonally adjusted data. The upturn observed in several branches of industry supports the conviction that export-oriented processing industry is the principal engine in overcoming the economic crisis.

Vigorous marketing policies along with successful measures to improve competitiveness provided many enterprises with the opportunity to increase the sales of production in foreign markets. The export industries in the fourth quarter continued to increase their production achieving notable growth, but in the manufacturing of wood pulp and wood products an annual increase was also observed. Although the weak domestic demand still has an important negative influence on industrial activity, the share of exports has lately grown in most all processing industry sub-branches, increasingly compensating the negative effects of domestic demand.

In breakdown by month, a 5.7% drop was observed in December after an 11.6% increase in November, yet it is a reflection of the instability observed in certain months, which the general upward trend remaining in place. From the annual perspective, industrial production in the processing industry decreased by 5.3% in December, which is an important improvement since February 2009 when the annual drop in processing industry reached 27.7%.

In assessing the potential developments this year, it should be noted current indicators, evaluation of the new export orders, and cooperation agreements already signed with foreign partners by several processing industry enterprises all give reason for optimism regarding the future development of the industry. Of course, the important role of domestic demand in the dynamics of the industry in the first half of the year has to be taken into account, which means that the recovery process in the industry will not be rapid.