Bleak Expectations for Romanian Manufacturing: March PMI Shows Persistent Downturn
Romanian manufacturing sector experiences steeper downturn in March, as per PMI® data
Things ain't looking good for the Romanian manufacturing sector. According to the latest PMI report, it's been a tough month for businesses, with all signs pointing towards a persistent downturn.
New orders, output, and employment all saw significant decreases, making it the ninth month in a row of contractions. The headline BCR Romania Manufacturing PMI came in at a disappointing 46.9, down from a six-month high in February.
That's not all. The Romanian economy is still dealing with reduced demand and tight budgets, which has led to a decrease in new orders from customers, both domestically and internationally. Factory production volumes have also been dropping for ten consecutive months, with the latest decline accelerating at a marked rate.
On the bright side, reduced demand for inputs helped alleviate some cost pressures, and there was an improvement in supplier performance for the first time on record. Supplier delivery times shortened, and fewer instances of delays were reported. But don't expect a quick recovery, as the outlook for Q1 2025 doesn't look promising—the sector is expected to remain in a contractionary phase.
Ciprian Dascalu, Chief Economist at BCR, commented on the situation, stating that "All components had a negative directional contribution this month." He also noted that the external environment is becoming more supportive for Romanian manufacturing, but uncertainty remains, particularly in light of U.S. tariffs on autos and Romania's indirect exposure to the German car industry supply chain.
So, if you're in the manufacturing business in Romania, it's time to buckle up and prepare for a rocky ride. Keep an eye on those cost pressures and supplier relationships, and try to stay optimistic as you ride out this storm.
From the 15% enrichment data: The Romanian manufacturing sector has been experiencing a continued contraction in Q1 2025, as indicated by the BCR Romania Manufacturing PMI survey results and industrial output data. Key points include:
- The Manufacturing PMI for Romania in March 2025 was 46.9 points, down from 48.3 in February, signaling ongoing weakened activity and sentiment among purchasing managers in manufacturing.
- Industrial output data for February 2025 showed a 5.2% year-on-year decline overall, with the core manufacturing sector experiencing an even sharper 6.1% annual contraction.
- New orders in manufacturing, a forward-looking indicator, also declined by 0.2% year-on-year in February and 1.8% for the first two months, suggesting limited signs of an industrial recovery within Q1 2025.
- The state's forecasting body revised down its expectations, estimating a severe industrial contraction of 3.6% year-on-year for Q1 2025, contrasting with a previously more optimistic projection of 0.4% growth for the entire year made last winter.
Overall, the manufacturing sector in Romania remains in a contractionary phase as of Q1 2025, with PMI data reinforcing the ongoing decline in production and new orders. The outlook for near-term recovery appears weak, with continued pressure on manufacturing activity expected at least through the first quarter of 2025.
- The contraction in the Romanian manufacturing sector, as per the BCR Romania Manufacturing PMI survey results and industrial output data, indicates a weakened activity and sentiment among purchasing managers in manufacturing.
- The manufacturing outlook for Q1 2025 doesn't seem promising, with all components having a negative directional contribution, as pointed out by Ciprian Dascalu, Chief Economist at BCR.
- In an attempt to alleviate cost pressures, panelists in the Romanian manufacturing industry are advised to focus on reducing demand for inputs and improving their supplier relationships.
- The finance and business sector should closely monitor the Romanian manufacturing industry, as the sector is expected to remain in a contractionary phase at least through the first quarter of 2025, with key indicators such as new orders continuing to decline.
