July came with good news from retail, which returned to positive territory, as a result of an increase in wages and a slight lending rebound. Industrial output, too, one of the most important indicators of the economy, rebounded in July and posted 5% growth, having slowed down to 3% in June compared with the same time of last year.
ING Bank’s chief economist Nicolae Chidesciuc, ussually one of the most pessimistic analysts, estimates Romania would see 0.7% economic quarterly growth in the third quarter, and a 1.6%-1.7% increase compared with the same period of last year. Chidesciuc says agriculture will contribute most of the growth, but with help from industry and the slight rebound in trade and services. Even though Europe is walking on shaky ground, the macroeconomic results are not bad, ING’s chief economist adds.
Positive signals of the business sector in July came from FMCG wholesalers, the automotive industry, furniture, courier service companies and major airports in July.
Sorin Gavrila, 44, the Bacau entrepreneur who along with Cristinel Lungu controls an almost EUR230 million business via consumer goods wholesaler Simba Invest, says that August was better than in previous years.
Consumer goods wholesalers are the first businesspeople to learn how the business of FMCG giants goes, a EUR20 billion market a year, and how the Romanian consumer behavior changed judging from the demand coming from stores.
July also brought the first positive signs in the automotive industry, after the market rose by 8.2% compared with the same month of 2010. New car sales had been down 18% in the first six months.
The furniture business, too, will have a better third quarter. “The third quarter is clearly better for Mobexpert. This is because the third quarter of 2010 started with a VAT hike, and many of the sales that should have happened in July were made in June,” Dan Sucu, Mobexpert owner told ZF. He went on to say the sales of his group would go up by 2% or 3% three quarters into the year.
Growth is what Viorel Catarama, another major Romanian entrepreneur, is talking about, as well. He currently employs 2,000 people in his stores and plants.
“We have 20% export growth and 8% growth on the home market in the first nine months. We are also registering growth in the third quarter, too. This is the first time since the beginning of the crisis, when we’ve had a trend reversal and can talk about growth,” Catarama explained.
Courier service companies, for which July and August are usually the slowest months of the year because clients go on vacation, are talking about an increase in the volume of shipments compared with the same time last year.
“July and August showed that sales were up 5% to 10% compared with the corresponding months of the previous year, but we still cannot draw a conclusion about September,” said Adrian Mihai, shareholder of Fan Courier, a EUR45 million business with a EUR9 million profit.
Good news in the summer months also came from the major airports in Romania, where traffic went up by 5% in July and August, with almost 2.5 million people passing through the airports in Bucharest (Otopeni and Baneasa), Timisoara and Iasi.
(English version by Loredana Fratila-Cristescu; Editing by Radu Bostan)