Romania’s industrial production index contracted by 4.2% y/y in Q1 and neared the lowest level in the past three years, according to the statistics office INS. The seasonal and workday-adjusted index (-0.4% q/q) has followed a visible downward trend after the post-Covid recovery in 2021 and 2022.
The seasonal and workday-adjusted index in Q1 was 7.7% below the average level of 2019 – before the Covid-19 crisis.
The core manufacturing industries contracted by 4.7% y/y in Q1 2025, with milder declines in the mining and quarrying (-1.5% y/y) and utilities (-1.9% y/y).
At a more granular level, the textile and clothing industries lost almost 20% y/y, while the chemical industry and metallurgy contracted by nearly 15% y/y. Even the manufacturing of road transport means (automobiles mainly) contracted by some 10% y/y.
On the upside, the oil processing industry reported 12% stronger output, and the manufacturing of pharmaceuticals surged by 22% y/y.
The government hopes the country’s industry will bottom out this year, driven by intense investments and stimulus from the Resilience Facility. However, the surveys among managers do not indicate imminent improvement.
Romania Manufacturing PMI index remained in the “negative” half of the 0-100 scale for the tenth month, in April, despite its modest improvement to 48.3 from 46.9 in March. Local manufacturing confidence also decreased in April versus March, according to the Economic Sentiment Indicator, due to shrinking production expectations and lower order books.
Erste Group, in an instant comment issued after the release of March industrial figures, confirmed optimism, saying that the industry could return to growth later this year, with an estimated increase of +1.1% in 2025.
Erste analysts assign their expectations to positive effects on local manufacturing from increased defence and infrastructure spending in Germany, offsetting the tariff war between the US and other countries. Confidence indicators are mixed, with easing contraction rates for local and European manufacturing, they admit.
iulian@romania-insider.com
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