Romania’s industrial output further contracted by 3.3% y/y in January-May, and by 4.5% y/y for the core manufacturing segment, compared to the same period of 2025, according to data from the statistics office INS. The annual decline steepened from 1.9% y/y in Q1 to 5.2% y/y in April-May, with a similar gradual deterioration in manufacturing.

The country’s industrial sector has lost ground significantly over the past five years, impacted by the rising cost of energy and labour. The labour- and energy-intensive industries have particularly lost ground: metallurgy and chemistry were impacted by the rising cost of energy, contracting by around one-third compared to 2021, while the country’s light industry contracted even more under the competition with lower-income countries. 

The oil refining industry also contracted by 21.2% over the past five years. The automobile industry (-19% y/y versus 2021) is struggling to cope with the challenges of electrification and intense competition from China. Overall, the industrial output contracted by 8.9% in January-May compared to the same period of 2021, and by 7.9% y/y when it comes to the manufacturing sector (utilities shrank by 14.5% y/y). 

Only a handful of industries driven by robust and predictable demand have gained ground over the past five years: food manufacturing (+20%), pharmaceuticals (+22.7%), paper products manufacturing (+14.7%, driven by online retail and logistics), and manufacturing of electronic/optic devices (+13.0%). 

Notably, the value added generated by Romania’s industry has deteriorated faster than the gross output – by around 18% in Q1 this year compared to the same period of 2021. This may be partly explained by higher energy prices pushing up the manufacturers’ production costs at a rate that they could not pass through to final consumers.

The January-May industrial figures confirmed the medium-term pattern. But the automobile industry and the oil refining industry underwent sudden contraction over the past year, after having remained more or less steady over the previous four years (2021-2025). While the country’s refineries are expected to recover after technical outages in the first part of the year, the automobile industry needs more stimulus.

As the industrial contraction over the past year (-3.3% y/y on average) accounts for more than a third of the five-year 8.9% decline – there were fewer industries posting encouraging performances. Food processing expanded by 1.9% y/y, but the traditionally robust pharma industry contracted by 2.3% y/y. Automobile production lost 11.5% of its volume over the past year, in January-May.

iulian@romania-insider.com

(Photo source: Andrii Yalanskyi/Dreamstime.com)