Romania's industrial output up 0.9% y/y in Q3, durable recovery linked to defence spending

Romania's industrial output increased by 0.9% y/y and by 1.1% y/y in the core manufacturing sector in Q3, after 2.6% y/y growth (+3.1% y/y in manufacturing) in September, according to data published by the statistics office INS. The annual growth rate in Q3 was slightly slower (+0.5% y/y and +0.6% y/y) when adjusted for the workdays (slightly more, on average, in the third quarter this year compared to 2024).

However, the annual advance boasted in Q3 partly reflects low-base factors after a significant industrial slowdown in Q3 last year.

The seasonally and workday adjusted index reversed the quarterly gain posted in Q2 and dropped by 1.9% q/q ( or by 2.4% q/q in the manufacturing sector).

Romania's industry thus heads towards the third year of contraction despite the fragile recovery signs seen over the past 12 months to September.

Hopes for further industrial recovery in 2026 are pinpointed by the defence spending across Europe.

As regards shorter-term projection, the BCR Romania Manufacturing PMI came in at 47.6 in October, down from 49.8 in the previous month, breaking a two-month streak of improvement in the value of the index.

All components except suppliers' delivery times had negative directional contributions in October, with the strongest negative influence coming from new orders and output. The most concerning aspect comes from new orders, which dropped sharply after having broken the 50.0 barrier for the first time in 15 months in September.

The defence-driven recovery will not come this year, but rather later in 2026 after the production contracts are sealed, and rather towards the end of next year or possibly in 2027 for activities that require new industrial setups.

(Photo source: Michal Bednarek/Dreamstime.com)