Romania’s Manufacturing Sector Enters Expansion Zone in April

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The BCR Purchasing Managers Index (PMI) for Romania’s manufacturing industry surpassed 50 points in April, entering the expansion zone for the first time since its inception, driven by increasing production and orders.

The data of the survey carried out by S&P have always been below the threshold of 50 points since it began to be carried out, in July 2023. However, starting from February, an improvement in business conditions is observed, and in April the index increased to 51.5 points , from 49.3 points in March.

In April, both the new orders and production components rose above the reference of 50 points, being the main contributors to the index moving into the expansion zone.

The employment intentions component also increased. The resumption of employment growth in the industry comes after a pause, but it remains modest in amplitude.

According to Ciprian Dascălu, chief economist of BCR, the current month’s figure may represent the initial indication of a rebound in Romania’s manufacturing sector, albeit with an anticipated non-linear trajectory. Romania’s manufacturing industry has faced notable challenges due to recent inflationary trends, with National Institute of Statistics data indicating a 2.0% contraction in manufacturing production in 2023 compared to 2022. The BCR PMI index suggests the possibility of a modest recovery beginning in the second quarter, yet further data is required to validate this projection.

Dascălu also warns that the return of Romanian industry is dependent on foreign demand, especially from Germany.

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