Romania's PMI at 15-month high, nears neutral benchmark in September

September's reading brought the BCR Romania Manufacturing PMI index to 49.8, which represents a 15-month high and comes after the 49.3 recorded in the previous month. The value is only marginally below the neutral mark of 50, showing only a marginal contraction reported in monthly terms, according to Erste Group.

Romania's industrial production increased by 4% year-on-year in the May-July period, according to the latest available data, with the core manufacturing sector advancing 4.5%. The improvement follows a gradual strengthening of Romania's Purchasing Managers' Index, which approached the neutral 50-point level in August, indicating stabilisation in manufacturing activity.

The further improvement in the PMI in September supports a positive trend in the country's industrial sector, which has undergone a negative trend since the war began in Ukraine.

All components of the PMI index made small, positive or negative, contributions in September.

The Output component improved once again this month but continues to remain in the negative territory, signalling a contraction as has been the case in the past 16 months. Some customer demand improvement was reported, however.

The new orders and new export orders components were above the neutral 50.0 value. Even though subdued client budgets and rising prices remain a problem, the rising demand can only be a good sign looking ahead, Erste Group points out.

More importantly, greater volumes of new business from the EU markets were reported.

Future business expectations remain optimistic with an improvement in the index value recorded in September.

The Employment Index remained, however, in the contraction zone in September, with some minor uptick in the index value.

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