Croatia's Industrial Production Falls for 9th Consecutive Month
ZAGREB, September 1, 2020 - In July 2020 industrial production in Croatia fell by 1.6% on the year, decreasing for the ninth consecutive month, albeit at a slower rate than in June, according to the national statistical office DZS.
Month on month, industrial production in July increased by 5.6%, but fell by 1.6% on the year.
"The annual decrease in the volume of industrial production, which has been ongoing since November last year, has slowed down ," analysts at Raiffeisenbank Austria (RBA) said in reference to the DZS report.
Industrial production contracted in two of five sectors, mostly in the production of non-durable consumer goods (-9.3%) and intermediate goods (-2.6%).
On the other hand, the production of capital goods increased by 14.7%, followed by energy (+2.1%), and durable consumer goods (+1.7%).
In the first seven months of the year, industrial production decreased by 5.7% on the year.
Data indicates a continued fall in third quarter
The decrease in production in July and the recent information about the fall in retail sales indicate that the economy will continue to contract in the third quarter.
That means that the economy will officially dive into a recession, which is defined as a fall of GDP for two consecutive quarters.
Last week DZS reported that GDP had contracted by a record 15.1% in Q2 on the year, which is the first time GDP has fallen since mid-2014.
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Is Chinese Rescue of Croatia's Burdened Shipyards Inevitable?
If the China Shipbuilding Industry Corporation (CSIC) gives up, it will be difficult to find another candidate for the ailing Croatian shipyards Uljanik (Pula) and 3 Maj (Rijeka) which is in the shipbuilding industry and is also a strong and respected player. Could a Chinese investment be on the cards?
As Poslovni Dnevnik/Suzana Varosanec writes on the 29th of April, 2019, after yesterday's meeting with Prime Minister Andrey Plenkovic and his government ministers, Hu Wenming, Chairman of the Board of China's largest shipbuilding company China Shipbuilding Industry Corporation (CSIC) confirmed that they are indeed moving towards serious consideration regarding the enfeebled Uljanik and 3 Maj shipyards, which have undergone months of turmoil.
''The prime minister gave us a very serious and detailed presentation of the whole situation,'' Wenming said, adding that they saw that these two shipyards were a very important topic for the Croatian public. "Not only did we bring people from our company - they're in charge of planning, we've already called on lawyers and investment banks, so we will outline what their views on the matter are after visiting the shipyards," Wenming stated.
With that, a key ''tour'' begins, because if CSIC ends up actually not being interested in putting its money into the situation, it will be a hugely difficult task to find another candidate in shipbuilding, which is a big player and has an interest in joining the European shipbuilding industry. Otherwise, this would be the first case of a Chinese takeover of a foreign shipbuilding company, so it is speculated that extensive calculations are being made, and of course whether they even want to have their first European shipyard is being considered. The CSIC is looking at the situation deeply and from all possible angles.
This event all began with the recent announcement of the arrival of the CSIC in Croatia with the aim of visiting the troubled shipyards in Pula and Rijeka. As was then announced, the CSIC chairman contacted Chinese Prime Minister Li Keqiang during his stay in the Republic of Croatia where he attended the summit "16 + 1" and after talking with the Croatian PM about the dire state of Croatian shipbuilding.
As things currently stand, the general belief is that the Chinese decision won't take long to come - it will be a simple and express "no" or "yes", while the third option, more specifically an unconditional "yes", will likely need to be waited for a little longer.
What the outcome of the potential Chinese presence in the Croatian shipbuilding industry is anyone's guess, and while some remain very suspicious of Chinese motives in Croatia in general, despite them already working on the long-awaited Pelješac bridge down in southern Dalmatia, whatever comes of their potential entry has got to be better than the current situation, especially for Uljanik.
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Click here for the original article by Suzana Varosanec for Poslovni Dnevnik
