Rapid Advancement in Romania's Industrial Sector: A 7.1% Year-over-Year Boost Registered in May
Romania's industrial production is expected to see a slight decline of 0.4% in 2025, according to Erste Research, marking an improvement from the 1.6% contraction forecasted for 2024 and the 3.0% drop predicted for 2023 [1]. Despite gradual improvements in confidence indicators, a meaningful recovery in manufacturing is not expected until 2026.
In contrast, the European manufacturing sector has shown resilience in the face of various shocks, such as US tariffs, the crisis in the Middle East, and Russia's ongoing war against Ukraine. In June, the HCOB Eurozone Manufacturing PMI climbed to its highest level since August 2022, indicating a positive trend [2].
The industrial output in Romania increased by 7.1% year-over-year (y/y) in May, and by 3.8% y/y in workday-adjusted terms. However, the combined industrial output decline in the first two months of Q2 is -1.5% y/y. When adjusted for workdays, the industrial output rose by 0.8% y/y [3].
New orders and output had a negative contribution to the index, while employment, stocks of purchases, and suppliers' delivery times lifted the headline figure [4]. The BCR Romania Manufacturing PMI rose in June to a one-year-high, remaining below 50, indicating contraction [5].
In Germany, the manufacturing component of the Ifo Business Climate Index improved marginally in June, with companies being more optimistic about the coming months. However, current business performance has been less favorable [6]. The growth in May reversed the negative growth of -9.1% y/y in April [7].
The industrial output in the 12 months to May is below the level in 2019 before the Covid-19 crisis, indicating a slow recovery [8]. The European manufacturing sector's resilience is noteworthy, as it continues to adapt and recover despite ongoing challenges.
[1] Erste Research predicts a slight decline in Romania's industrial production of 0.4% in 2025. [2] In June, HCOB Eurozone Manufacturing PMI climbed to the highest level since August 2022. [3] Romania's industrial output increased by 7.1% y/y in May, and by 3.8% y/y in workday-adjusted terms. [4] New orders and output had a negative contribution to the index, while employment, stocks of purchases, and suppliers' delivery times lifted the headline figure. [5] The BCR Romania Manufacturing PMI rose in June to a one-year-high, remaining below 50, indicating contraction. [6] Companies in Germany were noticeably more optimistic about the coming months, but current business performance has been less favorable. [7] The growth in May reverses the negative growth of -9.1% y/y in April. [8] The industrial output in the 12 months to May is below the level in 2019 before the Covid-19 crisis.
Despite the anticipated decline in Romania's industrial production in 2025, the European manufacturing sector, including Romania, has demonstrated resilience, adapting and recovering remarkably, even in the face of ongoing challenges such as the Covid-19 crisis, US tariffs, the Middle East crisis, and Russia's ongoing war against Ukraine. This resilience extends to the business sector, as evidenced by the positive trend in manufacturing PMI levels across Europe and the improvement in the Ifo Business Climate Index in Germany.
