A recent survey asked financial market experts for their view on the expected performance of various sectors in Central and Eastern Europe in 2009. The result? Better to be a food producer than a food preparer.
February's survey carried out by the Centre for European Economic Research (ZEW) and Erste Group found that 28% and 19% respectively of the 72 experts polled picked the food and the agricultural sectors as having the brightest prospects for 2009. "This outcome did not come as a surprise, as both branches are generally little vulnerable to shifts in demand," the report's authors, Mariela Borell and Oliver Herrmann, wrote.
Perhaps most striking were the predictions for the machinery and equipment sector. Despite the unfavourable investment climate, some 25% of respondents believe the CEE machinery sector, a large exporter earner for countries like the Czech Republic and Slovakia, will be the best performer this year. However, another 19% reckon it will be one of the worst sectors to suffer.
There is more unanimity on the hotels and restaurants sector, which some 31% reckon will be the worst performer. This is followed by, unsurprisingly, the construction sector; some 25% reckon that will be the biggest struggler this year. "Presumably, the experts fear the high funding requirements as well as the diminishing local demand and foreign investment activities," the report says.
The financial sector, the root cause of today's troubles, isn't expected to see much of a recovery this year, with 8% foreseeing further difficulties. Just 3% count the sector as a potential winner in 2009.
Looking at these sectors in a geographical perspective, the export-reliant Bulgarian textile industry, which in December lowered its expectations for the first half of 2009 due to worsening demand from abroad, is reckoned by every second respondent to see its prospects brighten over the course of this year, clearly considering Bulgaria to be the best-performing CEE country in the textile sector.
According to the majority of the experts, the producers of industrial goods from the Czech Republic, Hungary and Poland will face tougher times this year. The outlook for Croatia, Slovakia and Romania remains pretty unchanged, whereas most analysts regard the Bulgarian machinery sector to be "best performing" in this sector.
The wonderful coast of Croatia means it is the only county whose restaurant and hotel sector is reckoned to do well this year.
For financial institutions, the experts predict stable results in the Czech Republic, Croatia, Poland and Slovakia, but further troubles ahead in Bulgaria, Hungary and Romania.
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