Poor performance of Romania’s industry in December, expected impact on 2018 GDP figures

Romania’s industrial production registered an unexpected drop in December on lower output in key-manufacturing sector and large decline in mining and quarrying, that could have a significant impact on last quarter’s gross domestic product (GDP) value.

Compared with December 2017, the industrial production declined by 0.8 percent as gross series.

The industrial output dropped by 0.9 percent against November as series adjusted by number of working days and seasonality and by 15.6 percent in gross series, National Institute of Statistics (INS) data showed on Wednesday.

Production in the manufacturing sector, the largest sector of Romania’s industry, declined by 0.6 percent year-on-year in December, mining and quarrying dropped by 8.7 percent, while energy output increased by 1.5 percent.

In 2018, Romania’s industrial production rose by 3.5 percent, a much lower rate that the official estimate of 4.5 percent.

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The industry account for almost one quarter of Romania’s GDP and this poor performance is expected to have an impact on the 2018 GDP value. The first flash estimate regarding Romania’s 2018 performance will be released on Thursday.

Last month, the government has forecasted a GDP growth rate of 4.5 percent in 2018 based on a 4.5 percent growth rate in industry, but these fresh statistics shows a rapid deceleration of the economy at end-2018.

The decline of manufacturing production had an important impact on turnover of Romania’s industry, which rose by only 2.9 percent year-on-year in December, the lowest growth rate in recent years.

In 2018, the industry’s turnover rose by 11.8 percent.

The new orders in manufacturing increased by 4.7 percent year-on-year in December and by 15.8 percent in 2018.