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News 12 Jun 13

Grim Outlook For Macedonia’s Flagship Metal Industry

Macedonia’s flagship metal industry is struggling in ‘dramatic’ times and faces even grimmer prospects, the head of Macedonia's metals chamber of commerce has warned.

Sinisa Jakov Marusic
BIRN
Skopje
 

Mitko Kocovski noted that in the first four month of 2013, the industry that many regard as the backbone of the Macedonian economy recorded a drop of 22 per cent in production.

Even worse, by the end of this year, companies in this sector that depends heavily on demand from abroad expect a drop of 40 per cent in commissions.

Some 70 per cent of the country's total exports go to Europe.

“This may be the most dramatic period so far in this sector,” Kocovski said, warning that if troubles continue, production in some plants may shut down and workers may be laid off.

According to official data, the metal industry makes up 35 per cent of Macedonia's exports and employs 15 per cent of the country’s workers. “This is why we will ask for government support,” Kocovski said.

He said the sector needs lower electricity bills as well as the postponement of the implementation of tight EU anti-pollution rules.

Troubles for the industry did not start this year. Amid decreased demand owing largely to the European crisis, the industry saw a drop in output of 11 per cent overall last year.

Since the beginning of 2013, Macedonia's total industrial output rose for the first time in 13 months, boosting hopes that the country was finally exiting a prolonged economic downturn.

In comparison to the same period last year, the industrial production index in January-February 2013 rose by 1.9 per cent.

But Macedonia's Vice Prime Minister in charge of the economy, Vladimir Pesevski, has advised caution, saying that negative trends in the metal industry are indicative that the crisis is not over yet.

“The tendencies [for the economy] are slightly more favourable for Macedonia than for the surrounding states. But we should be careful,” Pesev said recently.

After two consecutive quarters of negative growth in 2012, Macedonia exited recession at the end of 2012 and is expected to finish 2013 with annual growth of around zero. The government is more optimistic. It envisages annual growth of 2 per cent this year.

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