Romania's industrial output contracted by 1.6% y/y in Q2, dragged down by the sector of utilities (-10.9% y/y), while manufacturing fared relatively better (-0.3% y/y), according to data published by the statistics office INS. 

The seasonally adjusted output dropped by 1.1% q/q, reversing the +1.1% q/q advance in Q1.

While the Q2 industrial output figures look relatively better compared to the previous six quarters (since the emergence of the war in Ukraine), there is no reason to believe this marks a change of trend, which remains negative. 

The volume of new orders (-3.4% y/y in June) and the Purchasing Managers' Index PMI index (47.8 points on a 0-100 scale in July) leaves not much room for optimism about a further recovery in Q3. 

The Government, under the Spring Forecast on April 30, projected a 1.2% advance of the gross industrial output (+1.6% for manufacturing) in 2024 and a 0.8% increase in the value-added generated by the industrial sector – a scenario that looks unrealistic at this moment.

Despite the negative mood, several industries perform well, posting positive growth rates in each of the first two quarters of 2024. Food production (+6.1% in Q1 and +8.6% in Q2), wood processing (not including furniture, 6.9% and 24.8%), chemical industry (14.5% and 15.3%) and manufacturing of transport means (other than motor vehicles, 8.8% and 14.5%) are the best-performing ones. 

Surprisingly, motor vehicle production posted negative performances in each of the two quarters (-9.2% and -4.1%) despite the larger number of vehicles reported by the two main automobile producers. 

In the first six months of 2024, automobile production in Romania reached 292,378 units, an increase of +8.66% y/y, of which Dacia contributed 169,998 units and Ford Otosan 122,380 units.

Other industries with negative performances in Q1 and Q2 are the manufacturing of electronic and optic products (mainly car parts), the furniture industry, and the light industry.

(Photo: Kanok Sulaiman/ Dreamstime)

iulian@romania-insider.com