Mixed trends at the end of 2017.
In November, the first year-on-year decline of industrial production was recorded after an extended period. Namely, the industrial output was 1.7 percent lower than in November 2016. Still, Zvonimir Savić, an analyst with the Croatian Chamber of Commerce, said this negative result was mainly a consequence of the fact that last November was the month with the highest level of industrial production in that month since 2009, reports Večernji List on December 31, 2017.
If we look at the first eleven months of the year, there was steady, but relatively slow growth of industrial production by 2.3 percent compared to the first eleven months of 2016. Despite the growth, Croatia is still almost 10 percent below the industrial output recorded before the economic crisis, in 2008. “At the level of the whole 2017, we expect industrial production to be about two percent higher than the year before. If the expected growth rate of two percent is maintained, the level of industrial output will exceed that from 2008 not before 2022,” said Savić, warning that the economic growth must accelerate.
At the same time, Croatia’s competitors are growing much faster. According to Eurostat, the industrial production at the EU level was 4.2 percent higher in October this year. The industrial production in the EU has more or less recovered and is only 1.8 percent lower than before the economic crisis.
Although there is a steady growth in industrial production, there has been no significant increase in employment in that part of the economy. Compared to the first eleven months of 2016, employment in the industry grew by only 0.6 percent. The highest growth in employment was recorded in the tobacco industry, which increased the number of employees by 7.7 percent, while the most significant drop in employment was recorded in oil and mining sectors.
On the other hand, consumer spending in Croatia grew by 5.7 percent in November compared to the same month last month, which means that it has increased for 39 months in a row. The Central Bureau of Statistics (DZS) announced on Friday the first estimate of retail trade turnover and, according to calendar-adjusted data, retail sales in November increased nominally by 7.8 percent and by 5.7 percent in real terms.
Also, “the annual growth rate has accelerated, following a slowdown in September and October,” said analysts of Raiffeisenbank Austria (RBA) in their review of the DZS report. The growth in November was faster than the month before when consumption increased by 3.1 percent year on year. According to data, retail sales increased by 5.1 percent in the first 11 months of this year.
“We expect that the data for December will show the continuation of a solid positive annual growth rate of retail trade, supported mainly by the pre-holiday and holiday spending, positive labor market developments and an increase in disposable income due to changes to the Law on Income Taxes,” concluded RBA analysts, adding that 2017 will be the fourth year in a row of consumption growth. In 2016, consumption increased by four percent.
Translated from Večernji List.
