Following an improvement in June, the confidence indicator in industry worsened in July again, going down by 1.6 points m/m. Chiefly the drop of the output projected for the next three months and lower demand for industrial goods were behind this outcome, according to the Statistics Office of the Slovak republic (SU).
The trend of industrial output declined 18 points from the previous month to 33 points. The decline in the industrial output was mainly influenced by manufacturers of textile and cloth and producers of electricity, natural gas and water. Makers of coke and refined crude oil products, means of transport as well as of metal and metal products share an optimistic view on the market situation. The evaluation of the overall demand dropped two points to minus eight points, which was the lowest level since February 2006, due to negative development in wood processing sector, and chemical and mining industries. No industrial sector posted a rise in demand. Nonetheless, up to 89 percent of respondents think that the demand is sufficient.
In the upcoming three-month period, a slight increase in prices of industrial products is expected on a decline in employment. When assessing factors restrictive to industrial output growth, over 50 percent of respondents felt no limiting factors, while 14 percent complained about a lack of staff. The still strong crown, price growth of input materials and lack of skilled labor force have a negative influence on the economic situation of businesses, as respondents noted.