Declining external demand. Romanian exporters begin to feel the slowdown in global activity

Sorin Melenciuc 26/03/2019 | 12:31

The Romanian exporters beggins to feel the effect of the slowing global activity as the external demand for local manufacturing products dropped in February.

According to an industrial survey conducted by the Bucharest political sciences university (SNSPA), the output showed some signs of recovery in February following two bad months – December and January.

“The production volume has escaped contraction and has risen to an average of 55 points compared to 45 in January. The level of recovery is similar to the one seen in February over the last 5 years,” the survey says.

But experts warn that external demand has weakened during the second month of this year.

“Export orders dropped unexpectedly from 59 in January to 54 in February. The decline is somewhat atypical in comparison with past years and with the reappearance of domestic demand. It could signal the further weakening of demand in the euro area, which would be quite worrying for Romanian exporters,” the study indicates.

Low mood in January

In January, Romania’s industrial production registered a modest increase on stagnant output in the key-manufacturing sector.

The industrial production rose by 0.7 percent year-on-year in January as the production in manufacturing, the largest sector of Romania’s industry, was almost flat (+0.1 percent year-on-year), mining and quarrying increased by 1.2 percent, while energy output increased by 3.2 percent.

Experts expect a quasi-stagnation of the Romanian industry this year. “With the Eurozone’s largest economy continuing to disappoint, we remain cautious on the growth prospects of the Romanian industry and maintain our view for quasi-stagnation in 2019,” ING Bank analysts said in a report.

These figures come after a unexpected drop of 0.8 percent in December of the Romanian industrial production, on lower output in key-manufacturing sector and large decline in mining and quarrying.

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