Romania’s industrial output volume index contracted by 3.3% y/y in August, after it boosted positive annual growth rates over the previous three months, according to data published by the statistics office INS. The negative annual growth rate came as a surprise, after the outlook for the country’s industry seemed to have improved over the past half a year.
The seasonally-adjusted production index dropped by 2.1% m/m, marking a new post-COVID record low after four consecutive months of decline.
The industrial output in 12 months to August dropped by 1.2% y/y compared to the previous 12-month period.
The weak reading in August reversed the positive trend established over the rolling 12 months to a negative annual growth rate of -5.3%, from a positive growth rate calculated a month earlier over the 12 months to July 2025. This witnesses the volatile conditions of the industrial activity facing a multitude of uncertainties.
The decline in the core manufacturing industries was steeper than average, -4.0% y/y on an annual basis and -2.7% m/m in seasonally and workday adjusted terms. The 12-month trend rate is not much different, however: -5.4% y/y.
The output in the “manufacturing of transport means” category, which includes the important automobile sector, dropped by 16% y/y in August and by some 5% y/y in the 12 months to August compared to the previous 12-month period.
The negative output in August took analysts by surprise by its amplitude, in the context of Romania’s PMI reaching the 15-month high and reaching the neutral benchmark in September (49.8 points) after a gradual improvement over the past half a year. The further improvement in the PMI in September seemed supportive of a positive trend in the country’s industrial sector, which has undergone a negative trend since the war began in Ukraine.
Erste Group expected a 0.5% m/m decline and a positive 0.5% y/y growth rate for August, according to the group’s research note.
Manufacturing confidence from the ESI survey improved to -1.5 in September from -1.8 in August, the financial group argued. This was, however, mainly driven by the expectation component, with some incremental positive contribution from lower inventories, while the order book level decreased.
In contrast, external confidence indicators were on a downward trend in September. The manufacturing component of the Ifo Business Climate Index for Germany marginally decreased for the second month in a row.
iulian@romania-insider.com
(Photo source: Silviu Matei/Dreamstime.com)
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