Romania’s industrial output increased by 7.1% y/y or by 3.8% y/y in workday-adjusted terms in May, the statistics office INS announced. The adjusted growth rate is the strongest in three years, but it was helped by base effects – Erste Group notes on a moderately positive note in a research update.
The performance in May reverses the negative growth of -9.1% y/y (-2.1% y/y in workday adjusted terms) in April – resulting in a combined -1.5% y/y decline of the industrial output in the first two months of Q2 – after the -3.7% y/y decline in Q1 and -1.6% y/y overall performance in 2024.
Adjusted for workdays, fewer in April-May this year compared to the same period of 2024, the industrial output rose by 0.8% y/y in the first two months of Q2. This is another indicator of the fragile upward trend seen over the past year – partly explained by the low levels of industrial activity reached over the past two years (over 4.6% y/y).
The industrial activity in the 12 months to May was 7.9% (6.9% in workday-adjusted terms), below the level in 2019 before the Covid-19 crisis.
Erste Research estimates industrial production growth at -0.4% in 2025, which would be an improvement compared to the 1.6% y/y decline in 20224 and the -3.0% y/y plunge in 2023. Local and external confidence indicators are gradually improving, according to Erste Research – which postponed meaningful recovery for manufacturing for next year.
The short-term outlook remains moderately positive. BCR Romania Manufacturing PMI rose in June to a one-year-high while remaining below 50, which still indicates contraction. New orders and output had a negative contribution to the index, while employment, stocks of purchases, and suppliers’ delivery times lifted the headline figure.
Manufacturing confidence increased in June according to the Economic Sentiment Indicator on higher production expectations.
The manufacturing component of the Ifo Business Climate Index for Germany improved marginally in June. Companies were noticeably more optimistic about the coming months, but current business performance has been less favourable.
In June, HCOB Eurozone Manufacturing PMI climbed to the highest level since August 2022. The European manufacturing sector showed resilience in front of shocks like US tariffs, the crisis in the Middle East, and Russia’s ongoing war against Ukraine.
iulian@romania-insider.com
(Photo source: Michal Bednarek/Dreamstime.com)
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