Romania’s industrial production contracted by 2.5% y/y in January, with a slightly milder decline of 2.3% y/y in the core manufacturing industries, the statistics office INS announced.

However, there are positive signs: the workday-adjusted industrial output increased by 2.1% y/y (reflecting the smaller workday count in January 2025 compared to 2024) and the seasonally- and workday-adjusted industrial production index (+2.5% m/m) remained on a positive path consolidated during H2 last year.

The industrial output in the 12 months to January dropped by 1.4% y/y, further sweetening its negative performance from -1.6% y/y calculated for the 12 months to December.

Romania’s January industrial figures come as no surprise after the 1.6% decline in 2024 and 3.0% y/y contraction in 2023, while a negative outlook is supported by analysts’ expectations measured in recent surveys. 

The Manufacturing PMI remained in February in the “negative” (under 50-point benchmark) for the eighth consecutive month and the expectations component of the CFA confidence index improved by only 1.7 points m/m at the end of January and remained at a very low level of 32.5 points deep in the “negative” outlook region.

However, analysts of Austrian group Erste have positive anticipations and see a return to growth for industrial production this year, forecasting a +1.1% increase. The positive expectations are pinpointed by rather recent developments in Europe: “significant investments in EU security along with large fiscal stimulus planned in Germany.” 

“Domestic and external confidence indicators appear to be rebounding from record lows and new orders for manufacturing are gaining speed gradually,” according to Erste Research. 

Indeed, HCOB Eurozone Manufacturing PMI rose to a two-year high at 47.6 in February as contractions in output and new orders eased.

In Romania, the main industries saw diverging performances in the first month of 2025.

In January, the output in road vehicle manufacturing plunged by 12% y/y, and textile and clothing manufacturing fell by 25% y/y and 21% y/y, respectively, while several other sectors saw milder contraction rates.

However, other industries started the year on the right foot: food manufacturing expanded by 3.8% y/y, and manufacturing of non-metallic mineral products (construction materials, such as cement, adhesives, or glass) surged by 11.2% y/y. Manufacturing of metal structures also saw an encouraging 5.0% y/y dynamics.

iulian@romania-insider.com

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