Romania’s industry shrinks by 2.0% q/q in Q3, failing to capture robust domestic demand
<p>The industrial output index in Romania contracted by 2.5% y/y, and the rate was slightly steeper (-2.6% y/y) in the manufacturing segment in the third quarter of the year (Q3), according to data published by the statistics office INS.</p>

<p>The seasonally-adjusted index diminished by 2.0% q/q (-2.7% q/q in the manufacturing segment) after the relatively better performances in Q2 (-1.2% q/q) and particularly Q1 (+1.1% q/q).</p>

<p>A large number of industries, ranging from energy-intensive (metallurgy, rubber, and plastic manufacturing), labour-intensive (light industries), or related to the auto industry (manufacturing of electronic and optic devices) or mining (coal), posted double-digit contraction rates.&nbsp;</p>

<p>There were industries that boasted double-digit growth rates, however: automobile production (to a lesser extent dependent on electric models), wood processing, crude oil refining, and manufacturing of metallic constructions.&nbsp;</p>

<p>The food and beverages industries, relying on domestic consumption, advanced by moderate rates (+6.3% y/y and +3.7% y/y), capitalising on stronger domestic consumption but not succeeding in substituting the massive volume of imports.</p>

<p>By broad category of goods, the manufacturing of durable consumer goods (such as automobiles) was the only segment that gained ground (+2.5% y/y) in Q3, while all the other segments contracted by between 1.2% y/y (energy goods) and 5.0% y/y (capital goods).&nbsp;</p>

<p>Producing 5.0% fewer capital goods at a moment when the government prides itself on record investments best reflects local industry’s weak capacity of serving the local market and thus opening the door to massive imports (+4.9% y/y in euros, in Q3 compared to only 0.7% y/y stronger exports in the same period of time).</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: <a href="https://www.dreamstime.com" rel="noopener" target="_blank">Michal Bednarek/Dreamstime.com</a>)</em></p>