Economy  
Venezuelan industries have been faced with plummeting sales, inventories and production since 2007. The Venezuelan Confederation of Industries (Conindustria) warned that this is the first time such low figures are recorded ever since 2004, after a general strike. The group stressed that the sector's decline is not the result of the global financial crisis.

Conindustria chairman Carlos Larrazábal regrets the fact that the industrial sector's capacity to create jobs has been undermined in the midst of the crisis.

Based on the latest Conindustria's survey on industrial trends, Larrazábal said that one third of employers have been forced to cut their payrolls. Further, only 10 percent of the 300 companies taking part in the poll consider that they can keep their payrolls uncut or even increase their staff.

Winding road
It is worth reminding that during the last three quarters, the manufacturing industry has failed to preserve the sustained growth rates recorded after the national lockout. The Central Bank of Venezuela (BCV) reported that between January and March 2009, the industrial sector, which is regarded as the true engine of the economy, showed a 1.1 percent decline.

"This is a disturbing fact," Larrazábal warns. The chairman of Conindustria added that by the end of 2009, the GDP of the manufacturing sector will end at -3.5 percent.

When asked about the reasons behind such a bleak outlook, respondents pointed to declining orders and tumbling sales, particularly of foodstuffs, beverages and tobacco.

Inventory levels of raw materials have also fallen and are similar to the levels recorded at the end of the fourth quarter of 2003, according to the survey.

Similarly to orders, sales and inventories, production has plunged as well. It is no surprise that from the end of 2008 to the first quarter of 2009, the industrial utilized capacity fell from 60.61 percent to 54.9 percent.

According to Larrazábal, there are different causes behind this decline. First of all, government policies, especially the inclusion of a socialist model in the Venezuelan economy, and secondly, the delay in the authorization and provision of US dollars which are required to import products.

Employers' expectations not encouraging. Over 30 percent of the companies surveyed consider that the situation is likely to become worse. In the case of the small and medium industry, the percentage of negative perception has increased. Meanwhile, 80 percent of respondents believe they may guarantee jobs for one to three months.

Translated by Gerardo Cárdenas

María Gabriela Aguzzi
EL UNIVERSAL