Manufacturing industry reports 'low confidence'

Manufacturing performance improved last May but confidence is low for the following three months, a survey of the industry shows.

A total of 201 manufacturing firms, employing about 12,850 employees, responded to the May industry survey carried out by the Federation of Industry with the collaboration of PricewaterhouseCoopers.

The findings show that manufacturers' local and export order books bounced back since the start of the year and production registered in the three months prior to May was well above manufacturers' expectations.

Possibly as a result of this, stocks of finished goods were recorded at a "below normal" level, contrary to the "above normal" levels registered in the previous months since the beginning of the year. On the other hand, manufacturers' confidence for the following three months was less positive in May than that registered in April.

Only the consumer goods sector was confident that production would increase in the next three months.

The intermediate and investment goods sectors were expecting a decrease in their production.

Moreover, a greater number of manufacturers expect to increase prices over the next three months.

This was the situation mainly for producers of investment and intermediate goods who are most likely to increase prices rather than producers of consumer goods. At the same time, even though cost pressures are still intense, firms are expecting to increase their total employment over the next three months. This may reflect manufacturers' medium term expectations for an overall production increase.

The survey also indicates that total employment in the consumer goods sector is expected to decrease.