In 2006 Bulgaria registered growth of 6.1 per cent against 3 per cent in the EU-27. Major drivers of national growth include a thriving private sector and growth in investments.


Accelerated investment activity contributed to a dynamic industry sector which registered growth of 8.3 per cent in 2006 and is generating over 31 per cent of the value added in the economy. Manufacturing excels among industry sectors with real growth in value added of 19 per cent in the fourth quarter of 2006 against the same period of 2005, growth in construction stabilizes at levels about 10 per cent, whereas the other two industry sectors register decline (27.5 per cent in generation of electricity and thermal energy and 17.7 per cent in mining and quarrying).


GDP per capita registers positive development, going up from 25.6 to 35 per cent of the EU average in the period 1997-2005. On the other hand, analyzed as a labor productivity measure, the indicator stands at EU lowest levels.


Industry in Bulgaria- Overview


Manufacturing industry in Bulgaria is the most important industrial sub-sector with a share of 73 per cent in its value added. Manufacturing industry has a substantial share in the country's gross domestic product. It accounts for almost 18 per cent of value added created in the economy.

  
In 2005 products of the manufacturing industry amount to BGN 31.5 billion (Table 1.2) and 40 per cent of them are sold on the international market. Value added created in 2005 amounts to over BGN 6.2 million.


The gross operating surplus of enterprises in the sector in 2005 amounts to BGN 3.3 billion, i.e. 53.4 per cent of value added remains with employers and the other BGN 2.9 billion or 46.6 per cent of value added are personnel costs (BGN 2.1 billion in the form of salaries and wages and BGN 0.7 billion for social charges). During the year gross investment in fixed assets in manufacturing amounts to BGN 2.7 billion, including 66 per cent for equipment.


In 2003-2005 the share of manufacturing in value added grows while in employment declines slightly as a result of the faster productivity growth in manufacturing than in the other sectors of the economy. The following industry sectors account for the highest shares in value added in manufacturing in Bulgaria:


  • Food processing - 14.3%,
  • Machine building - 9.6%,
  • Production of coke and petroleum products - 9.4%, and
  • Apparel - 8.9%.


Three of these industry sectors have the highest shares in employment


  • Apparel - 22.4%,
  • Food processing - 16.6%, and
  • Machine building - 10.4%.


The Apparel industry creates high value added share, accounting for a large share in total manufacturing value: 4 per cent, against 1.2 for EU. This is due to the positioning of the Bulgarian production in a specific production niche: toll processing.


The low perspective of such production, which rests exclusively on the advantage of low labor costs, is compensated by high specialization and considerable restructuring of the industry sector in the recent years, which would probably help Bulgaria retain its competitive position in the region.


The trend is for the production of apparel in CEE to shrink due to high competition from Turkey and China. Another important factor for industrial development is good Bulgarian traditions in the production of textile.






 

Manufacture of wearing apparel; dressing; dyeing of fur




Data are expressed in:

2003

2004

2005

Number of enterprises

units

4166

4606

4520

Turnover or gross premiums written

millions of

675.4

749.5

763.9

Production value

millions of

656.2

730.9

742.7

Value added at factor cost

millions of

254.5

292.2

286.5

Gross operating surplus

millions of

65.4

80.8

77.4

Total purchases of goods and services

millions of

437.0

480.1

491.5

Personnel costs

millions of

189.1

211.4

209.2

Wages and Salaries

millions of

137.3

154.7

157.4

Social security costs

millions of

51.8

56.7

51.8

Gross investment in tangible goods

millions of

61.8

62.9

60.3

Gross investment in machinery and equipment

millions of

36.2

37.1

34.9

Net investment in tangible goods

millions of

54.0

51.2

47.7

Number of persons employed

units

146687

152371

144310

Turnover from industrial activities

millions of

638.1

704.0

722.2

Total intra-mural R & D expenditure

millions of

0.0

:

0.0

Total number of R & D personnel

units

0

:

0

Turnover per person employed

thousands of

4.6

4.9

5.3

Gross value added per employee

thousands of

1.8

2.0

2.1

Share of personnel costs in production (%)

%

28.8

28.9

28.2

Labor cost per employee (Unit labour cost)

thousands of

1.4

1.4

1.5

Share of employees in persons employed

%

95.5

95.8

95.6

Growth rate of employment (%)

%

8.2

3.9

-5.3

Number of persons employed per enterprise

units

35

33

32

Value added at factor cost in production value

%

38.8

40.0

38.6

Share of gross operating surplus in value added

%

25.7

27.6

27.0

Share of value added in manufacturing total

%

11.9

10.7

8.9

Share of value added in industry total

%

:

:

6.5

Share of prod value in man. total

%

6.0

5.3

4.6

Share of turnover in manufacturing total

%

5.9

5.2

4.5

Share of employment in manufacturing total

%

23.1

23.7

22.4

Share of employment in industry total

%

:

:

19.7

Investment per person employed

thousands of

0.4

0.4

0.4

Investment rate

%

24.3

21.5

21.0

Share of R&D expenditure in value added

%

0.0

:

0.0

Sales for export, share in production value (%)

%

63.9

58.3

64.8

Sales for export, share in turnover (%)

%

63.0

56.9

63.0







 

Manufacture of textiles




Data are expressed in:

2003

2004

2005

Number of enterprises

units

762

792

807

Turnover or gross premiums written

millions of

400.1

487.5

530.9

Production value

millions of

401.1

476.1

524.4

Value added at factor cost

millions of

105.0

134.4

143.8

Gross operating surplus

millions of

42.0

66.4

72.3

Total purchases of goods and services

millions of

317.0

362.3

406.0

Personnel costs

millions of

63.1

68.0

71.5

Wages and Salaries

millions of

46.1

50.0

53.7

Social security costs

millions of

16.9

18.0

17.8

Gross investment in tangible goods

millions of

79.9

62.0

72.1

Gross investment in machinery and equipment

millions of

50.7

41.0

47.9

Net investment in tangible goods

millions of

73.2

53.9

50.4

Number of persons employed

units

35382

35729

34069

Turnover from industrial activities

millions of

381.8

462.7

505.4

Total intra-mural R & D expenditure

millions of

0.0

0.0

0.0

Total number of R & D personnel

units

16

22

21

Turnover per person employed

thousands of

11.3

13.6

15.6

Gross value added per employee

thousands of

3.0

3.8

4.3

Share of personnel costs in production (%)

%

15.7

14.3

13.6

Labour cost per employee (Unit labour cost)

thousands of

1.8

1.9

2.1

Share of employees in persons employed

%

97.8

97.8

97.8

Growth rate of employment (%)

%

1.0

1.0

-4.6

Number of persons employed per enterprise

units

46

45

42

Value added at factor cost in production value

%

26.2

28.2

27.4

Share of gross operating surplus in value added

%

40.0

49.4

50.3

Share of value added in manufacturing total

%

4.9

4.9

4.5

Share of value added in industry total

%

:

:

3.3

Share of production value in manufacturing total

%

3.7

3.4

3.3

Share of turnover in manufacturing total

%

3.5

3.4

3.1

Share of employment in manufacturing total

%

5.6

5.5

5.3

Share of employment in industry total

%

:

:

4.6

Ratio of stocks of finished products and work in progress to production value

%

2.7

0.4

1.1

Investment per person employed

thousands of

2.3

1.7

2.1

Investment rate

%

76.1

46.2

50.1

Share of R&D expenditure in value added

%

0.0

0.0

0.0

Sales for export, share in production value (%)

%

61.6

65.7

61.8

Sales for export, share in turnover (%)

%

61.8

64.1

61.0


 

The following industry sectors account for the highest shares in value added in manufacturing in Bulgaria:

  • Food processing - 14.3%,
  • Machine building - 9.6 %
  • Production of coke and petroleum products - 9.4%, and
  • Apparel -8.9%


Three of these industry sectors have the highest shares in employment  


  • Apparel - 22.4 %
  • Food processing - 16.6 % and
  • Machine building - 10.4%.


Although Apparel industry in Bulgaria is one of the sectors which accounts for highest shares in value added in manufacturing in Bulgaria and has highest shares in employment but it is among the least profitable industries of Bulgaria.


The most profitable industries in the Bulgarian manufacturing industry are the production of RT equipment, ceramic tiles, glass, and pharmaceuticals. They are characterized by a high share of gross operating surplus in value added and a relatively high gross operating rate.  



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