The aggregate value of new orders received by Romania's manufacturing companies declined by 5.6% y/y in May and by 3.6% y/y in the first five months of 2026, according to data published by the National Institute of Statistics (INS). Manufacturing turnover also weakened, falling by 1.3% y/y in May and by 1.7% y/y in January-May.

The deterioration came as industrial producer price inflation accelerated sharply. Overall industrial producer prices rose by 12.0% y/y in May, up from around 4%-5% before February, when crude oil prices surged following the escalation of the conflict in the Middle East. Producer prices for manufactured goods increased by 8.9% y/y.

Adjusted for inflation, both new orders and turnover recorded substantially steeper declines in real terms.

The sharper contraction in new orders compared with turnover also suggests that the downturn in manufacturing activity has yet to bottom out, as new orders typically lead future production.

The manufacturing output volume index fell by 6.0% y/y in April-May, accelerating from a 3.4% decline in the first quarter and a 1.0% contraction in the fourth quarter of 2025.

The continued deterioration raises the risk that Romania's industrial sector will remain in contraction throughout 2026. In its May forecast, the National Commission for Strategy and Prognosis (CNP) projected a 0.5% decline in overall industrial output this year, following a 0.1% decrease in 2025.

The CNP expects industrial production to return to growth of 1.7% in 2027. However, the outlook remains uncertain amid continued volatility across European manufacturing, where weak external demand, elevated energy costs and geopolitical tensions continue to weigh on industrial activity.

iulian@romania-insider.com

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