The BCR Romania Manufacturing PMI index has further slipped to 47.2 in November from 47.6 in October, signalling that the downward momentum which began last month has persisted. Not only the output sub-indicator, but also the new orders have deteriorated marginally compared to October and significantly compared to September, when the index neared the 50-point neutral benchmark.

The supplier delivery times remain the sole positive element of the PMI index, but it seems empirically and also fundamentally inversely correlated with the dynamics of the new orders and output, hence its predictive value diminishes.

As regards the industrial production index, it has remained more or less stable over the past year – still marking on average a mild (-0.7% y/y) decline compared to the previous 12-month period (when it was decreasing).

The annual dynamics for the rolling 12-month period have improved from steeper deterioration rates over the past years, though. In the third quarter of the year alone, the industrial output increased by 0.9% y/y in line with the slight improvement of the Manufacturing PMI index.

If current trends persist, 2025 will mark the third consecutive annual decline in industrial output, according to Erste Group Research.

Looking ahead, substantial EU security investments and Germany's fiscal stimulus for infrastructure and defence spending are expected to boost European industrial production, according to the analysts of the Austrian group. External demand remains critical for domestic manufacturers, and expectations point to a potential rebound in industrial output next year.

iulian@romania-insider.com

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