Fresh signs of crisis: Romania’s industrial sector falls deeper on weaker external demand

Sorin Melenciuc 12/09/2019 | 10:02

Romania’s industrial output declined in July for the second month in a row, as external demand falls and inventories continue to rise, raising questions regarding the sustainability of the current government policies.

Official data show that industrial output dropped by 3 percent year-on-year in July, following another decline in June, of 6.6 percent.

According to a recent industrial barometer, the main reason behind the slowdown in industrial production is the insufficient rate of internal and external orders.

According to the report, stocks maintained flat and the indicator stood at 46 points in July, 4 point below the expansion threshold.

Worse, managers’ expectations have fallen steadily from one month to the next. The Synthetic Confidence Indicator dropped from 70 in January to 52 in July.

Managers expect layoffs as the labour force indicator in the sector maintained in negative territory (47, meaning contraction).

In the first seven months of this year, the industrial production declined by 0.9 percent year-on-year as the production in manufacturing, the largest sector of Romania’s industry, declined by 2.5 percent, mining and quarrying inched down by 7.4 percent, while energy output decreased by 4.8 percent.

In 2018, Romania’s industrial production rose by 3.5 percent.

The industry account for almost one quarter of Romania’s GDP and this poor performance has an impact on the GDP value.

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