Romania’s industry undergoes slowdown driven by car manufacturing in May
Romania’s industrial production dropped by 6% in May compared to April, in absolute terms, and by 8.5% in seasonally adjusted terms, according to the statistics office INS.
A large part of the slowdown can be attributed to the car manufacturing sector (-13.2% mom) and its related horizontal sectors: electronics, rubber & plastic parts manufacturing. Even the construction materials manufacturing sector (non-metallic minerals), particularly strong recently thanks to the buoyant constructions sector, dropped by 3.5% mom in May.
With several notable exceptions (such as metallic constructions manufacturing, +5.0% mom), the quasi totality of industrial sectors posted negative dynamics in the month.
Compared to May 2020 - when the industry was deep into crisis - the production index boasted a significant 28.8% annual advance. However, compared to May 2019, before the crisis, the industrial activity in Romania lags still by 10.3% a of May 2021.
Notably, Romania’s industry boasted encouraging recovery until April - when the production was 3% above that in April 2019.
The slump in May can be partly attributable to the semiconductors crisis: the drop in car production and related industries account for 2.6pp of the 6% mom industrial production contraction. Another 1.4pp was a seasonal effect of lower utilities delivered.
The remaining 2pp reflects the uncertain, sluggish, and volatile recovery of the global manufacturing chains that remain the major risk for the post-Covid recovery, particularly for an industry so dependent on foreign industrial groups like Romania’s.
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