Romania’s industrial companies show the first signs of crisis and cut jobs as domestic demand declines, according to a fresh industrial barometer.
“Although export orders have slightly increased in May, domestic demand remains weak, firms reduce staff numbers, and production costs decrease on job cuts and diminished activity,” the report says.
According to the report, stocks have declined and the indicator has reached 47 points, 3 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 62 in May.
In 2018, Romania’s industrial production rose by 3.5 percent, a much lower rate that the official estimate of 4.5 percent.
The industry account for almost one quarter of Romania’s GDP and this poor performance has had an impact on the 2018 GDP value.
Romania’s GDP rose by 4.1 percent last year, a much lower rate than the government’s forecast.
The industrial production registered a modest increase in the first four months of this year on limited output in the key-manufacturing sector.
The industrial production rose by 0.8 percent year-on-year in January-April as the production in manufacturing, the largest sector of Romania’s industry, increased by 1.3 percent, mining and quarrying grew by 2.2 percent, while energy output declined by 2.4 percent.
In April, the industrial output increase by 1.4 percent year-on-year, suggesting lower demand and lowering the sentiment in the sector.