For years, the economy of Bulgaria has undergone a lasting restructuring process whereby some industries are growing rapidly and are increasing their share in the economy, while others are shrinking and reducing their burdens. Among the growing industries is the industry, which has developed at a good pace since 2000 and increases its gross benefit, excluding the crisis period (2009-2010. Its share in the economy has also risen since the millennium – from 21% in gross value added in 2000, the industry in 2017 already accounts for a 24% share.
In addition to industrial goods, Bulgaria’s economy also produces more and more services, which also often remain unnoticed. The ICT sector, the outsourcing of business services and the financial sector are among the increasingly important sectors of the economy, if we judge from their contribution to it. The ICT sector already has a share of 5.5% in gross value added (compared with 3.2% in 2000), outsourcing – 6,1%, and Finance and Insurance – 7.5%. At the same time, the sector that has been “losing ground” most visible in the local economy for the past 17 years is agriculture – despite the huge subsidies for it under the Common Agricultural Policy and national supplementary payments. In public services (administration, health, education, etc.) and real estate there is also a drop in shares, but much less.
In addition, here is what goods are being produced more and more in Bulgaria. The industry’s most prominent developments since 2000 include metal products, electrical equipment, furniture, rubber and plastics, car parts, machinery, equipment and weapons, computer and communication equipment, wheels, paper and board.
In the above-mentioned processes, the increase of production from the beginning of 2000 to January 2018 is far above the average for the manufacturing industry and in some cases it reaches 3-4 times (see the information below). The reason for expansion is usually high competition in the foreign markets and significant export output, which is also confirmed by export data.
Change in Manufacturing Production (January 2018 vs. January 2000),%
Processing industry – 125.7 %
Manufacture of food products – 112.8%
Manufacture of beverages – 10.6
Manufacture of tobacco products – 54.8
Manufacture of textiles and textile products, except apparel – 48.2%
Production of clothing – 58.0%
Leather processing, Manufacture of footwear and other articles of leather – 8.4%
Manufacture of wood and of products of wood, except furniture – 75.1%
Manufacture of paper, paperboard and other products of paper and paperboard – 219.2%
Printing and reproduction of recorded media 72.8%
Manufacture of chemical products 65.8%
Manufacture of medical substances and products – 18.0%
Manufacture of rubber and plastic products – 399.5%
Manufacture of other non – metallic mineral products -139.6%
Manufacture of basic metals – 156.0%
Manufacture of fabricated metal products, except machinery and equipment – 370.7%
Manufacture of computer and communication equipment, electronic and optical products – 252.0%
Manufacture of electrical equipment – 494.6%
Manufacture of machinery and equipment, general and special – 284.8%
Manufacture of motor vehicles, trailers and semi – trailers – 385.5%
Manufacture of motor vehicles and not motor vehicles – 278.9%
Furniture manufacturing – 398.2%
Production not elsewhere classified – 349.2%
Machinery and equipment maintenance and installation – 88.7%
Consumer durables – 513.1%
Products for intermediate consumption – 122.2%
Consumer non – durable products – 60.6%
Energy products – 10.0%
Source: NSI, calendar-adjusted data
The only sector with a decline in production since 2000 has been tobacco products – because of health policies, the rise in prices due to the increase in excise duties, the illegal market and, in general, the shrinking consumption of such products throughout Europe and the developed countries. Among sub-sectors with relatively low performance (ie growth below the average for the whole sector) are leather, textiles, shoes, wood, beverages, food, etc. All of them traditionally belong to goods with a relatively low processing rate and relatively low benefit respectively. By contrast, most of the sectors that have grown sharply since 2000 are those adopted for sectors with high benefit, such as machinery, electrical equipment, computer and communication equipment, car components, bicycles, and more.
This restructuring of production to sectors with higher benefit is also seen in foreign trade data, and in particular in exports. It is clear that the big “winner” of the restructuring of the economy, industry and exports is precisely the investment goods that belong to the goods with high benefit. They have increased their share of exports more than double since 2000 – from 11 to nearly 26%. These include machines, appliances and machines, electrical machines, vehicles, parts and other investment goods. It is remarkable that all investment goods subsectors increase their share in the country’s exports without exception. This restructuring towards commodities with higher benefit occurs at the expense of all other major product groups – energy resources, consumer goods, raw materials and materials. This does not mean that their exports are declining, on the contrary – its growth is relatively slower than that of investment goods.
However, it is important to note that in the three groups mentioned above, whose share of total exports shrinks, and there are products that enjoy increasing weight in external sales. For example, in consumer goods, the proportion of food is rising; the same applies to feedstock, which also have a significantly higher share in 2017.