Romania’s industrial production index (chart) plunged by 4.2% y/y in August, marking one of the most significant annual declines in the past year and a half.

The manufacturing sector’s output contracted by 4.5% y/y.

The industrial slowdown hasn’t come as a surprise, after Romania’s exports and imports posted marked declines (of 7.5% y/y and 3% y/y respectively) in August. 

The outlook for the manufacturing sector does not look encouraging, as Romania’s Manufacturing PMI index (chart)  compiled by BCR dropped to 47.3 point in September, marking a 2.7-point negative deviation from the 50-point neutral benchmark and remaining in the contractionary zone for the third consecutive month after the short-lived improvement in April-May.

The average PMI in the third quarter stands at 47.8, down from 51.2 in the second quarter.

In the first two months of Q3 (July-August),  industrial output contracted by 1.8% y/y and by 1.9% y/y in manufacturing industries – at steeper rates compared to Q2, but in line with the overall medium-term industrial activity slowdown.

The industries that keep performing well are food and beverages, where the output rose by more than 10% compared to 2021 average level and keeps growing at significant rates (+6.5% y/y and +4.5 y/y for July-August period), but also the oil refining industry, the paper industry and the manufacturing of transport means other than road vehicles. The manufacturing of rubber products, metallurgy and the light industries are, in contrast, losing ground.