The seasonally-adjusted industrial output in Romania picked up by 2.0% (+2.4% for manufacturing) in January, but this doesn’t change the big picture: the country’s industry is close to five years of industrial decline.

Compared to January 2022, the gross industrial production contracted by 5.4% (-3.8% for the manufacturing sector), according to data published by the statistics office INS.

It is the third month in a row that the industry posts negative annual performance, and actually, the positive figures are increasingly rare and small. The industries that still post positive growth rates are not many: the manufacturing of food or “computer, electronic and optical devices” (mostly car parts such as cables) are two of them.

But even the “road vehicles” (automobile) industry is stagnating despite the buoyant production figures announced by Dacia and Ford plants. 

It is possible that outsourcing in the automobile industry explains this discrepancy as sectors such as “machinery, not elsewhere classified” posted significant increase recently – but this is just a hypothesis, and in this case, the whole industrial output figure would be significantly altered. 

The country’s deindustrialisation occurs despite multiple grant schemes extended by the government and the European Union. A EUR 300 mln scheme for investments in productive capacities was enacted last year (Government decision HG 959/2922), and EUR 150 mln was already earmarked for projects in an attempt to put an end to the process.

Under the latest forecast issued in January, the government hopes for 0.6% industrial growth (value-added terms) this year, followed by more robust growth rates of 4%-5% in the coming years. It is a rather optimistic projection.

The industry, measured by the gross value added generated, has followed roughly the same pattern as the gross output – which means that the structure of products has not shifted to more value-added market segments. 

iulian@romania-insider.com

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