Producer confidence drops slightly

Producer confidence fell slightly in April. The indicator stood at 4.6, as against 5.8 in March. The indicator dropped mainly because manufacturers’ opinions on their stocks deteriorated considerably. In March, producer confidence had reached the highest level in three years.

Producer confidence consists of three component indicators: manufacturers’ opinions on their stocks of finished products, the expected output in the next three months and manufacturers’ opinions on their order position.

Opinions on stocks of finished products deteriorated considerably in April, but manufacturers were more optimistic about their future output than in March. Opinions on their order positions improved marginally.

Just as in the preceding months, manufacturers anticipate a rise in factory gate prices over the next three months. They reported that the value of orders received had increased. With 105.4, the order position index (orders received expressed in months of work) was slightly higher than in March. In April, manufacturers were optimistic about future employment in their sector, but slightly less than in March.

The capacity utilisation rate climbed to 80.7 percent in April, versus 79.9 percent in March. Despite the improvement, the capacity utilisation rate remains low. In April, entrepreneurs considering production capacity too large outnumbered those considering production capacity as too small. According to 19 percent of manufacturers, production was hampered by lack of demand. This percentage is slightly below the level of the previous quarter, but remains high in a historical context. Manufacturers think their competitive position improved slightly on the domestic and foreign market in the first quarter of 2011 relative to the fourth quarter of 2010.

Producer confidence in manufacturing industry