The plus registered by industry dwindled during the first half of this year. Production growth slowed down to 6.1% in the first half, from 7.7% in the first 3 months, in line with data released by the National Statistics Office (INS).
Practically, June was the weakest month of this year for the industry, after a modest 2.4% increase registered in April, which was accounted for by the Easter holidays.
Despite the slowdown, industrial output is still registering higher-than-expected growth. For the entire year, the National Prognosis Commission projects a 5.7% advance for production output; a rate that, for now, has exceeded results for six-months. In comparison, industry last year witnessed a 7.1% increase in terms of production, the best result of the past five years.
Industry accounts for approximately 25% of the GDP, so that a slower growth rate in this area (6.1% in the first half from 7.7% in the first quarter) is likely to translate into a weaker growth rate in the overall economy.
In Q1 of this year, the economy expanded by 6%, at a slower than expected rate, because of slower consumption and a weaker performance in terms of budget revenues collection.
As yet, INS has not published data on Q2 and H1 economic growth, with the information to be published in around a month.
However, the weaker industrial figures are likely to be offset by the slight rally of retail and by the steady boom in constructions. Retail sales started rebounding in June (plus 16%), after witnessing a modest evolution in the first half of the year. In the first 6 months of this year, retail posted a 9.6% increase, much weaker than last year's (24%), but above the Q1 rate (4.3%).
Retail accounts for around 12-15% in GDP and points to an increase in consumption, the economic growth driver of recent years.
The only sector where statistical data does not indicate a sluggish growth rate is that of constructions, where market growth did not fall below 27% in any month of this year (against the same month last year).
As a result, in real terms, the constructions market advanced by 31.4% in H1. Including price hikes in constructions and the effect of RON growth against the euro, the market soared, in euros, by over 50%, in this year's Q1.
In other words, the constructions sector (weighing almost 10% in GDP) is still the most dynamic economic sector and continues to grow above expectations.
For the economy, calculations are more complicated: industry is slowing down, retail is witnessing a slight rally, whilst constructions continue to boom.
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