BCR Romania Manufacturing PMI: Romanian manufacturing output expands for the first time in ten months
Production and new orders rise after nine straight months of decline - Business confidence picks up, while hiring is back on the agenda - Cost inflation eases and selling prices rise only fractionally
- Production and new orders rise after nine straight months of decline
- Business confidence picks up, while hiring is back on the agenda
- Cost inflation eases and selling prices rise only fractionally
An improvement in the health of the Romanian manufacturing sector was signalled for the first time in the survey's history, according to the latest BCR PMI® data. Amid reports of improved market conditions, both new orders and output increased. As a result, jobs growth was renewed following eight successive months of cuts.
Meanwhile, price pressures eased and manufacturers' expectations towards future output were brighter.
The headline BCR Romania Manufacturing PMI® is a composite single-figure indicator of manufacturing performance derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
A PMI reading above the 50.0 no-change mark signals an improvement in the health of the sector over the month, while a figure below 50.0 points to a deterioration.
Up from 49.3 in March to 51.5 in April, the headline PMI index registered its first above-neutral score seen since data collection began last July. The latest reading signalled a modest improvement in business conditions in the sector.
Following nine months of successive declines, output and new orders both recorded growth in April. Renewed job creation also boosted overall business conditions. Though stocks of purchases were depleted again, the rate of decline eased on the month and was also therefore a positive directional influence on the headline figure.
Reports of improved market conditions and new client introductions drove the uplift in order book volumes in April. Though only modest, the uptick ended a nine-month stretch of decline. This in turn led manufacturers to increase their production volumes. Here, the speed of expansion was also only muted, however.
On a less positive note, international sales continued to drop in April. Panel members frequently noted that demand for Romanian manufactured goods from foreign markets, Europe in particular, remained subdued.
Goods producers were increasingly optimistic that output would rise over the year ahead, with firms expecting market conditions to improve and geopolitical tensions to ease. In fact, excluding the opening month of the survey in July 2023, the degree of positive sentiment was the strongest on record so far.
To support the rise in production and in order to fulfil incoming new orders, job creation was renewed across the Romanian manufacturing sector. That said, the rate of jobs growth was only modest.
