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Albania is no longer producing, costs for materials and supplies are falling

Politiko 2025-04-24 13:39:39

Albania is no longer producing, costs for materials and supplies are falling

Excluding the pandemic year, business investments in materials and supplies have declined in 2023 for the first time since at least 2010, thus confirming the reduction in export production and the decrease in prices for raw materials from the depreciation of the euro.

According to official INSTAT data, in 2023 business investments in materials and supplies reached 1.2 trillion lek, a decrease of 5.8 percent compared to 2022.

Market operators claim that there are three main factors that have influenced this decrease. The first is related to the depreciation of the euro, which has made imports of raw materials cheaper, the second is the contraction in the quantity of goods imported by some businesses in the processing industry sector, which lost customers due to the decline of the euro, and the third is the decline in commodity prices on international markets.

By sector, it can be seen that the largest reduction in expenses for materials and supplies is in the energy and oil sector, which was affected by the decrease in prices in international markets.

The decline in material costs in furniture businesses is also linked to business bankruptcies in this field. Other data from INSTAT show that businesses in this sector had the highest bankruptcies in recent years, even though the construction business is booming.

Wholesale trade business spending declined by 8 percent in 2023, and this decline is mainly due to the depreciation of the euro.

Over the last two decades, spending on materials and supplies has undergone significant changes, from a modest level in the early 2000s to historic records after 2020.

Data analysis shows that in the years 2005–2007 there was a sharp increase in businesses' spending on raw materials, reflecting the expansion of operational activity and the improvement of production capacities.

After rapid expansion, a period of consolidation occurred until 2012. From 2013 to 2019, raw material costs increased systematically, while in 2020 there was a sudden decline due to supply chain disruptions and restrictive pandemic measures./ Monitor.al

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