Page 86 - economic report 2021

trend in production is based on the fact that the industry sector is benefiting from more dynamic
domestic demand and the impetus from goods exports and the recovery in global trade. In parallel,
the average productive capacity utilisation also demonstrated the good progress in industry,
rebounding to 67.1% in the second half, 15 points higher than the 2020 average and already very
close to the 2019 level (69.3%).

Finally, sales prices continued an upward trend, which may suggest that businesses, with their
margins being squeezed by rising energy and commodity prices, are starting to pass on part of the
higher production cost to their clients.

Among the factors that may limit progress in business activity over the next months, weak
demand (quoted by 46% of businesses) remains the main obstacle in the second half of 2021.
The most notable of the other factors are rising operating costs, which has become the second
most important obstacle cited by businesses (39%), and the shortage of qualified workers (30%).

Business forecasts are the most optimistic in the last five years and indicate that industrial activity
will continue to gain momentum throughout the first half of 2022, although the risks are ever higher.

Table 10.2
BUSINESSES’ OPINIONS OF DEVELOPMENTS IN INDUSTRY (% of businesses)

2019 2020 2021
Jan-Jun Jul-Dec Average Jan-Jun Jul-Dec Average Jan-Jun Jul-Dec Average
1. Business act vity Good 35 35 35 4 14 9 22 49 36
(reviewed half-year) Normal 44 53 49 36 49 43 44 39 42

84 Bad 21 12 17 60 38 49 33 13 23
Balance 14 23 19 -56 -24 -40 -11 36 13
2. Orders High 15 15 15 7 1 4 10 19 15
(reviewed half-year) Normal 56 61 59 16 41 29 44 54 49
Low 29 24 27 78 58 68 46 28 37
Balance -14 -9 -12 -71 -57 -64 -36 -9 -23

3. Stocks of f nished products Excessive 9 4 7 14 8 11 4 1 3
(reviewed half-year) Adequate 49 47 48 39 38 39 42 50 46
Insufficient 0 7 4 14 14 14 15 14 15
The Andorran economy: developments in the main sectors | X. Industry
No stocks 42 43 43 34 41 38 39 34 37
Balance 9 -3 3 0 -6 -3 -11 -13 -12

4. Average product on capacity ut lisat on 70.0 68.5 69.3 50.1 54.3 52.2 58.8 67.1 62.9
(in %) (reviewed half-year)
5. Product on Higher 18 29 24 7 1 4 33 52 43
(compared with same half-year Similar 44 43 44 14 35 25 43 39 41
of previous year)
Lower 38 28 33 79 63 71 24 9 17
Balance -20 1 -10 -72 -62 -67 9 43 26

6. Sales prices Higher 15 3 9 2 3 3 14 27 21
(compared with previous Equal 79 91 85 80 77 79 71 66 69
half-year)
Lower 6 7 7 18 20 19 15 7 11
Balance 9 -4 3 -16 -17 -17 -1 20 10
7. Number of employees More 15 17 16 5 4 5 4 16 10
(compared with previous Same 76 77 77 65 78 72 78 79 79
half-year)
Less 8 5 7 30 18 24 18 6 12
Balance 7 12 10 -25 -14 -20 -14 10 -2

Source: Chamber of Commerce, Industry and Services of Andorra.