A slight monthly growth in production in June

In June a slight monthly growth was observed in production. According to seasonally adjusted data, the index of physical industrial production volumes increased 1.4% over May to which a substantial growth in the power industry (11.5%) and a small one in the processing industry (0.9%) both contributed. Such monthly developments were not unexpected, since in June the levels of entrepreneur confidence in industry were a little better than in May.

Year-on-year, a substantial drop in industrial production volumes is still observed, evidencing the complicated situation in the sector; yet some stabilising tendencies are gradually becoming apparent. According to data adjusted to the number of working days, the drop in the processing industry in June amounted to one fifth (18.5% in the industry sector as a whole). The data on production in the processing branches of industry indicate that the overall downslide was significantly influenced by the branches of mechanical engineering and metal processing. A substantial decrease was observed in other sectors as well. The one branch that showed both monthly and yearly growth was wood processing.

With a view to future developments, the low demand has to be taken into account: no miracles can be expected in the next few months. On the other hand, confidence indicators regarding industry showed a tendency of creeping slowly up, supporting continued stabilisation trends. Much will depend on the extent to which the Government will be able to stimulate the economy under conditions of limited resources.