17 May 2006

The Web
Business Today


Stronger order books under pressure from falling prices

Manufacturing order books in April are still below normal, but they now stand at the highest level reached in the last ten months according to the April Industry survey results published by the Federation of Industry.
As a consequence of this improvement in both domestic and external demand, manufacturers’ expectations for production growth improved to reach the highest levels ever recorded in this survey series.
Different sectors underwent a notable split in fortunes. In April, the Intermediate Goods Sector registered significant above normal order books in contrast to below normal order books recorded in the previous two months.

The Investment Goods Sector registered strengthening domestic demand, and above normal export order books compared to below normal export order books in March. At the same time, domestic and external demand for Consumer Goods declined.
Production expectations remained in positive territory for all three sectors. This indicator strengthened significantly for the Consumer Goods Sector, and the Investment Goods Sector, but slightly weakened for the Intermediate Goods Sector.
The number of firms with above normal stock levels has continued to increase gradually as it has been doing since December 2005. This build-up in stock levels, combined with an expected increase in overall manufacturing employment, is intended to meet current and future demand for locally produced goods.
Nonetheless, most manufacturers plan to decrease their selling prices. This, together with higher energy and fuel related bills and other cost increases, should keep profit margins of manufacturing firms under significant pressure.
The April Industry Survey was carried out between the 5 and the 30 of April 2006 with 189 manufacturers, employing around 12,109 employees, replying to the survey.

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