ANALYSIS AND REVIEW OF THE SITUATION IN THE METAL SECTOR OF THE FEDERATION OF BIH
The metal and electrical industry is traditionally the backbone of the processing industry in Bosnia and Herzegovina. It is known that this is an export industry, which markets its products in EU countries, where Germany, Slovenia, Austria, Croatia and Italy are leading the way. Nor should we ignore the Scandinavian market, to which BiH companies increasingly export their products.
From 2014 to the end of 2018, each year for the metal and electrical industry was more successful than the last. The number of employees in the Federation of BiH in 2014 was 24,000, and at the end of 2018 it was 31,000 workers. Exports and imports also recorded growth, and the number of investments in this industry grew.
We have to say that 2019 was a year of stagnation for the metal and electrical industry, and there were several reasons. A mild crisis in the global automotive industry affected that the growth of FBiH automotive industry exports was modest and amounted to 2%.
Due to the introduction of 100% customs duties on the export of products to Kosovo and the introduction of quotas for the import of steel into the EU, the export of iron and steel was lower by 1% compared to 2018. Also, in 2019, the export of non-ferrous metals fell by more than 30%. However, it should be emphasized that all other branches of the FBiH metal and electrical industry had export growth in 2019, with metal products, power machinery, machinery and means of transport, etc. leading the way.
The severe crisis, caused by the Corona Virus COVID-19 pandemic, which affected the whole world, also affected Bosnia and Herzegovina. The metal and electrical industry of Bosnia and Herzegovina felt the negative consequences already at the beginning of 2020, with the appearance of the Corona virus in China. The decline in the FBiH metal industry business was significant in the first 6 months of 2020. We can see that exports from BiH in 2020 were 8.79% lower than in 2019, while exports from the Federation were 10% lower compared to the previous year.
At the beginning of 2021, there was more mass vaccination in developed countries, which resulted in increased optimism and increased demand on the market. After 2020, the year of stagnation and decline of the Bosnian economy, 2021 brought positive balances and increased demand on the market. Considering that the most important foreign trade partners of Bosnia and Herzegovina are the EU countries and the region, the provision of immunization in these countries had a positive impact on the economy of Bosnia and Herzegovina.
Economic recovery will certainly take several years.
If we look at the year 2021, we see that the export of metals and their products grew by 87.87%, while the import grew by 72.03%.
The export of machinery, apparatus, mechanical devices, boilers, medical instruments, nuclear reactors and parts in 2021 grew by 26.87% compared to 2020, while imports grew by 22.73%.
The export of electrical machinery and equipment and their parts in 2021 grew by 32.79%, while the import grew by 4.03%.
The FBIH’s exports of vehicles and their parts grew by 15.8% compared to the previous year, while in the same period, imports grew by 24.46%.
In 2021, the export of weapons and ammunition and parts grew by 43.79% compared to 2020, while the import was lower by 9.24%.
METAL INDUSTRY IN 2022
Judging by the first quarter, solid results can be expected in 2022 as well. The increase in exports is evident in all branches of the metal and electrical industry.
The export of metals and their products grew for the first three months of 2022 compared to the same period in 2021, it grew by 76.33%.
The export of machines, devices, mechanical devices, boilers, medical instruments, nuclear reactors grew by 19.88%.
The export of electrical machines and equipment and their parts grew by 24.78%.
The export of vehicles and parts grew by 24.36%.
The current situation in the world, above all the war in Ukraine, trade relations of major powers and other tensions in the world, leave no room for optimism. The prices of raw materials, energy and other products are constantly increasing. This leads to an increase in product prices but also to a decrease in demand for exported products.
We hope that there will still be a gradual stabilization, and the drop in the price of metals that happened in the last month can be a kind of announcement that there will be a stabilization but also a new recession.