The industrial output index in Romania (chart) contracted by 2.5% y/y and the rate was slightly steeper at 2.6% y/y in the manufacturing segment, in the third quarter of the year, according to data published by the statistics office.

The seasonally-adjusted index diminished by 2.0% q/q (-2.7% q/q in the manufacturing segment) after the relatively better performances in Q2 (-1.2% q/q) and particularly Q1 (+1.1% q/q).

A large number of industries, ranging from energy-intensive (metallurgy, rubber and plastic manufacturing), labour intensive (light industries) or related to the auto industry (manufacturing of electronic and optic devices) or mining (coal)  posted double-digit contraction rates. 

Other industries boasted double-digit growth rates: automobile production (to a lesser extent dependent on electric models), wood processing, crude oil refining and manufacturing of metallic constructions. The food and beverages industries, relying on domestic consumption, advanced by moderate rates (6.3% y/y and 3.7% y/y), capitalising on stronger domestic consumption but not succeeding in substituting the massive volume of imports.

By broad category of goods, the manufacturing of durable consumer goods (such as automobiles) was the only segment that gained ground, by 2.5% y/y in Q3, while all the other segments contracted by between 1.2% y/y (energy goods) and 5.0% y/y (capital goods). 

The 5.0% fall in capital goods production at a moment when the government prides itself on its record investments best reflects local industry’s weak capacity of serving local market, thus opening the door to massive imports, which rose by 4.9% y/y in euros, in Q3 compared to only 0.7% y/y stronger exports in the same period.