Executives predict modest recovery in Q2

Romanian executives anticipate a modest recovery of processing industry and services and a "relative stability" in construction and retail industry in the second quarter. However, it will take longer before the rebound of the economy drive down the unemployment rates, and all sectors will be forced to reduce headcount in the next quarter too, data from the National Institute of Statistics show (INS).

According to the last INS survey, executives in processing industry anticipate a modest growth in production in the second quarter with 8% cyclical variation versus 3% in March survey.

Executives in this sector expect companies to start a new wave of layoffs in the coming period (cyclical variation -8%), most likely the mid-size companies with 250-500 headcount (-13%). Tobacco, printing, paper manufacturing, are expected to take the heaviest losses this quarter (-48% and -28% cyclical variation).

In the services sector, executives anticipate a mild growth in demand, the cyclical variation being +8% versus +4% a month earlier. However, companies will continue shedding jobs (-7%) in particular the large ones with a workforce of 500 and plus.

Construction execs are slightly more optimistic compared to April, betting on a stability in output (cyclical variation +1% versus -11% in March survey) and in orders (-1%). Layoffs still looming in the sector as well (-12%).

As for the retailing industry, executives improved forecasts, and anticipate a stabilization of activity in the next three months (+4%) driven by mild increase in sales but see more job cuts ahead (-12%).

Prices are likely to grow further in almost all industry sectors, except for services, where managers anticipate a "relative stability".

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