Oil keeps exports afloat in January-February, factory output plummets

2025-03-17 13:10:00, Ekonomi CNA

Excluding oil, the rest of Albanian exports suffered a record decline in the first two months of the year, by 28%. Today's INSTAT data shows that domestic production in most export groups has suffered a drastic decline.

Albanian exporters are being affected by the unfavorable demand situation in international markets, as many factories closed their activities in the first two months of the year.

The increase in oil exports by over 64% in the first two months of 2025 compared to the same period last year has barely managed to cover the gap of decline in all other groups.

INSTAT announced today that in February 2025, exports of goods reached a value of 34 billion lek, increasing by 4.3% compared to the same period a year earlier and by 7.3% compared to January 2025. Imports of goods reached a value of 68 billion lek, decreasing by 8.6% compared to a year earlier and increasing by 12% compared to January 2025.

This month's trade deficit is 34 billion lek, decreasing by 18.6% compared to February 2024 and increasing by 17.1% compared to January 2025.

During February 2025, the following groups contributed to the increase in exports of 4.3%: “Minerals, fuels, electricity” with +11.1 percentage points, “Food, beverages, tobacco” with +1.7 percentage points, “Machinery, equipment and spare parts” with +0.2 percentage points. While the following groups had a negative impact: “Construction materials and metals” with – 6.9 percentage points, “Textiles and footwear” with -1.0 percentage points, “Chemical and plastic products” with -0.8 percentage points, etc.

Exports during this two-month period increased by 4.6%, compared to a year earlier. The groups that have positively influenced the annual growth of exports are: “Minerals, fuels and electricity” with +12.0 percentage points, “Food, beverages, tobacco” with +1.1 percentage points.

While the groups that were negatively affected were: "Construction materials and metals" with -6.3 percentage points, "Textiles and footwear" with -1.7 percentage points and "Chemical and plastic products" with -1.0 percentage points.

Textiles and footwear are not doing well, factories have started closing

In February, exports of textiles and footwear, the largest exporting group in the country (with 30% of the total), fell by 1.6%. For the two-month period, the contraction is 5.5%.

For more than two years, the industry has been going through a difficult period influenced by many factors such as rising costs that have caused partners to relocate to other countries.

The exchange rate had a very negative impact and this has caused many clients to move orders from Albania at the beginning of this year.

This situation is forcing many factories to close, according to reports from the Exporters Association. The largest bankruptcies have occurred in districts and factories that employed fewer than 120 workers, worked mainly on subcontracting, had lower profit margins and were unable to withstand the crisis.

The fashion sector is also facing a decline in demand in international clothing markets. Industry representatives expect an improvement in the situation after the second half of the year.

Building materials and metals, strong shrinkage 34%

“Construction materials and metals” moved up to the fourth largest group in the country for the two-month period, with 12.7% of the total. This group is influenced by the performance of Kurum, the steel processor, which is one of the largest exporters in the country.

In February, this group fell by 34.1%, while for the 2-month period the contraction is 32.3%. The sector is suffering from weak regional demand and shrinking prices.

Minerals, fuels, strong growth 64%

“Minerals, fuels, energy” moved into the first largest group in the country, with 59% of total exports in February. In February, group I increased sales by 59%, while for the 2-month period the increase is 64%. The performance of this group is dependent on the sales of Bankers Petroleum, the largest exporter in the country, and on the trading of electricity, which is related to the weather.

Food, drink and tobacco on the rise

“Food, beverages and tobacco”, one of the best-performing groups in recent years, is recording growth. In February, its exports increased by 15.5%, while for the 2-month period the expansion was 9.4%. Despite its potential, the sector is being affected by rising costs, which are making it less competitive in the region, as well as by weather conditions.

Machinery, equipment, spare parts in the numbered place

“Machinery, equipment, spare parts” was the other group that has not been growing in the last year. This group is suffering from the depreciation of the euro, rising costs and labor shortages. In February, exports increased by 2.2%, while for the 2-month period the contraction is 2.5%.

Imports on the rise

As a two-month period, imports increased by 4.7%, compared to the first two months of 2024. The groups that have positively influenced the annual growth of imports are: "Minerals, fuels, electricity" with +1.9 percentage points, "Food, beverages and tobacco" with +0.7 percentage points and "Chemical and plastic products" with +0.4 percentage points. While the groups that have negatively affected are: "Machinery, equipment and spare parts" with -5.6 percentage points, "Construction materials and metals" with -1.3 percentage points and "Wood and paper products" with -0.3 percentage points.

While the groups that had a negative impact were: "Machinery, equipment and spare parts" with -5.6 percentage points, "Construction materials and metals" with -1.3 percentage points and "Wood and paper products" with -0.3 percentage points.

In February 2025, the countries with which Albania had the greatest increase in exports, compared to February 2024, are: Kosovo (63.7%), Greece (10.2%), Germany (7.5%), etc.

While the countries with which exports have had the largest decrease are: Italy (14.1%), North Macedonia (22.6%), Austria (0.4%), etc.

During this two-month period, the countries with which Albania has had the greatest increase in exports, compared to a year ago, are: Kosovo (76.8%), Germany (3%) and Greece (6.3%).

While the countries with which there was the largest decrease are: Italy (15.9%), North Macedonia (11.0%), etc.

In February 2025, the countries with which Albania had the largest increase in imports are: China (16.6%), Greece (10%), Spain (46.3%), etc. While the countries with which imports had the largest decrease, compared to February 2025 are: Italy (2.5%), Turkey (41.2%), Germany (12.1%), etc.

During this two-month period, the countries with which Albania has had the greatest increase in imports, compared to a year ago, are: Italy (1.2%), China (31.1%) and Greece (6.3%).

While the countries with which imports have had the largest decrease are: Turkey (30.4%), Germany (7.8%) and the USA (37.1%).