According to analysts, the delay in the economic recovery impacts the expectations on the market. China and the USA are the largest consumers of copper in the world. The reason for the drop in prices of copper and other non-ferrous metals are the concerns for delay in the global economic recovery due to the unfavorable production ratios in a number of countries, including the USA and China.
On the other hand, the consequences from the disaster in Japan are expected to maintain high the demand of main raw materials, such as lead, copper, zinc and aluminum, since they will be necessary for the recovery of the country. This effect is expected when hospitals and corporations begin purchasing batteries and own power sources, such as portable generators. Last year Japan consumed 5% of the world production of aluminum and copper. The long-term demand of copper, steel and aluminum is also expected to grow, when Japan begins replacing the out-of-order power-lines and fixing the damages on the infrastructure and buildings.
According to data from the Bulgarian Construction Chamber the construction industry reports at the end of Y2010 over 20% decrease against 2009. The chamber indicates Y2010 as the hardest for the industry over the last ten years. According to data from the National Statistical. Institute the annual shrinkage equals 19.2% (over 28% with housing construction and 2.5%) with infrastructural construction).
• 1100 companies have been obliterated from the professional construction register
in 2010. Presently, the companies in it number 4072.
• 145 000 people are employed in the industry against 263 000 at the beginning of
• There are 7 – 8 large companies on the market which can cover large sites under
Operational programs. The rest are small and medium- sized companies.
• Before the crisis the construction industry volumes equaled around BGN 29 bn
annually and now they have dropped down to BGN 11 – 12 bn.
• Presently, the main investor is the state. The state budget covers only the cofinancing under the EU projects.
• There are over BGN 100 million due by the state and another BGN 30 millions
due by municipalities to construction companies. Road construction companies
have the largest receivables.
• The financing of municipalities has been suspended because of the forthcoming
elections and because 6 months prior to elections mayors have no right to sign
Until the end of the year the companies will most probably operate with advance payments
and bank loans. The payments will be initiated as early as 2012.
Over 2010 the consumption, relied on to be among the main drives for growth of the Bulgarian economy, continued to be low in volumes. Households economize and try to compensate for their reduced income, job losses and life becoming more expensive, by piling up reserves. Due to this reason the demand for white and brown goods marks considerable decrease. The latest inquiry regarding consumer confidence showed that due to the fear of dismissals and inflation, households will go on postponing purchases, trying to economize.
Eurostat data showed that in March 2011 Bulgaria ranked third in Europe by price growth – the inflation was 4.6%. The level of consumption over 2010 reported statistically is close to that of 2009.
The hardest times for brewing industry in Europe are expected to be over. At the annual meeting of the Brewers in Europe in Brussels it was announced that there were clear signs for overcoming the stagnation, resulting from the crisis and the European brewing industry was ready to proceed forward. Bulgaria ranks 17th among the EU countries with regard to beer consumption and 18th among all the European countries. Bulgaria is still far from the typically beer-oriented countries –the Czech Republic, Germany and Austria. But this is a matter of traditions and variety of the offered brands. For example, there are 1900 producers
of the different types of beer in Germany, including small breweries, with 4000 for the whole of Europe. For the time being only the small breweries in Europe, including the restaurants with own production, are not affected by the crisis.
The brewing industry in Bulgaria reported its gravest drop over the last 20 years. According to the Brewers Union in Bulgaria (BUB) the sales of beer in this country have reached the record low levels of 1991. The brewing companies have sold 4,815 m. hectoliters of beer over 2010.
Recently the so-called plastic or polymer pipes are gaining more and more popularity on the market. This term encompasses a vast group of products differing in their characteristics. Even the individual features of pipes made by the same material but by different producers may vary. Main disadvantage of plastic pipes is the fact that they have low resistance to chlorinated water. Plastic materials consist of two main groups – thermoplastic and thermosetting materials. The products from the first group soften when heated but are elastic and unbreakable. Polyethylene is an example of this group. Plastics in the second group do not melt when heated but they are not so elastic.
Grain prices continue to rise on a global scale. The price index of FAO – Food and
Agriculture Organization of the United Nations has increased by 5.5% in comparison to March and by 71% against April 2010. Wheat prices have increased by 4%, as a result of the unfavorable climatic conditions. At the same time latest evaluations indicate a recovery in the global grain production in 2011. Yields will increase by 3.5%. Despite that, the grain stocks will shrink during this year down to the lowest level since 2008 due to the intense consumption of bread wheat. Despite the favorable preliminary production estimations, the climatic conditions will be the determining factor during the following months. Last year there
were extremely optimistic projections which changed drastically due to the bad weather in the summer. What is comforting though, is that the International Grains Council projects a 2011/2012 harvest of 672 million tons which is by 22 million tons more than that in 2010/2011. The consumption will grow by only 10 million tons and it is assumed that the transitional stocks will grow up to 61 million tons. Yields will be higher in the EU countries, Russia and Ukraine.
Propensity to save continues to prevail over the one to consume with household financial assets having recorded solid growth last year and return of risk appetite supporting an increasing role of more sophisticated products. Economic recovery and easing of job market tensions weighed positively on consumer sentiment, but increases in food and energy prices could negatively affect households’ propensity to buy and hit low income earners especially hard. Income growth should support some resumption of household debt appetite. The CEE economies showed convincing signs of economic recovery in 2010, although in the context of still fragile and uneven domestic labour market conditions and growth in household disposable income among countries. The more supportive macroeconomic environment translated into gradual normalisation of household financial conditions throughout Central and Eastern Europe.
In February 2011 the current account was positive at EUR 207.9 mn. Аs of end-February 2011 gross external debt reported EUR 36,063.2 mn or 94.4% of GDP. Foreign reserves registered EUR 12,2 bn in March 2011. In 2010 the expenditures for acquiring fixed tangible and intangible assets in industry have decreased by 21.1% y/y. Consumer price index increased to 5.6% y/y in March 2011. Producer Price Index on Domestic Market in February 2011 rose by 1.1% m/m and by 12.5% y/y. By preliminary seasonally adjusted data the turnover in division ‘Retail trade at constant prices in February 2011 increased by 0.2% m/m and by 0.1% y/y. Unemployment rate fелл to 9.52% y/y at end-March 2011. Fiscal reserve declines 6.3% m/m in February 2011. In March 2011, the annual growth rate of broad money (monetary aggregate M3) was 7.4% and their total amount was BGN 51.415 bn. In March 2011 net domestic assets were BGN 50.460 bn and registered 4.5% y/y increase. As of end-March the total capital adequacy of the overall banking system was 17.66%. Home average prices drop 5.6% y/y in Q1 2011. Share indices of the BSE ended mixed at end March 2011 in lower turnover.
In the period January 2011, the current account was positive – EUR 158.1 mn. (0.4% of GDP), against a deficit of EUR 291.9 mn. (0.8% of GDP) for January 2010)
As of end-January 2011 gross external debt was EUR 36,318.3 mn. (96.3% of GDP) and which was by EUR 361.2 mn. less against the end of 2010 Foreign reserves rose by 0.9% m/m (EUR 105.6mn) to EUR 12.33bn as of end- February
2011. According to the seasonally adjusted data, the GDP growth rate in the fourth quarter of 2010 is 2.1% compared with the third quarter of the year and 2.8% compared with the same quarter of the previous year. In March 2011 the business conjuncture in the country changes negatively. The total business climate indicator decreases by 4.1 percentage points. The annual inflation in February 2011 compared to February 2010 was 5.2%. Total producer price index in January 2011 grew by 12.1% comparing to the same month of 2010. The preliminary data showed that the industrial production index, seasonally adjusted,
increased by 3.2% in January 2011 as compared to December 2010.