Romania’s industry shrinks by 2.0% q/q in Q3, failing to capture robust domestic demand

The industrial output index in Romania contracted by 2.5% y/y, and the rate was slightly steeper (-2.6% y/y) in the manufacturing segment in the third quarter of the year (Q3), according to data published by the statistics office INS.

The seasonally-adjusted index diminished by 2.0% q/q (-2.7% q/q in the manufacturing segment) after the relatively better performances in Q2 (-1.2% q/q) and particularly Q1 (+1.1% q/q).

A large number of industries, ranging from energy-intensive (metallurgy, rubber, and plastic manufacturing), labour-intensive (light industries), or related to the auto industry (manufacturing of electronic and optic devices) or mining (coal), posted double-digit contraction rates.

There were industries that boasted double-digit growth rates, however: automobile production (to a lesser extent dependent on electric models), wood processing, crude oil refining, and manufacturing of metallic constructions.

The food and beverages industries, relying on domestic consumption, advanced by moderate rates (+6.3% y/y and +3.7% y/y), capitalising on stronger domestic consumption but not succeeding in substituting the massive volume of imports.

By broad category of goods, the manufacturing of durable consumer goods (such as automobiles) was the only segment that gained ground (+2.5% y/y) in Q3, while all the other segments contracted by between 1.2% y/y (energy goods) and 5.0% y/y (capital goods).

Producing 5.0% fewer capital goods at a moment when the government prides itself on record investments best reflects local industry’s weak capacity of serving the local market and thus opening the door to massive imports (+4.9% y/y in euros, in Q3 compared to only 0.7% y/y stronger exports in the same period of time).

(Photo source: Michal Bednarek/Dreamstime.com)