Romania’s industrial production volume increased by 8.2% y/y in 2017, marking the strongest performance since the 2008-2009 recession, the statistics office said. The 9.5% y/y advance in Q4 was the third-best in the post-recession period (with stronger growth seen in Q4 2013-Q1 2014).
The economic recovery in the EU area (and particularly the improved sentiment) has played a key role in the performance of Central and East European economies and remains focal for further gains. The availability and cost of the labour force are increasingly becoming constraints, though.
Romania’s state forecasting body expects the industrial growth to ease from above 8% in 2017 to slightly over 5% y/y in 2018-2019 and even less (4.3%-4.5%) in 2020-2021.
The industrial growth rate in Romania last year was double the average 4.0% p.a. advance by the country’s industrial sectors over the nine-year post-recession period and more than quadruple the 1.7% advance in 2016.
Production in the core manufacturing sector advanced by 8.9% y/y, versus 4.5% p.a. average growth in 2009-2017 and 2.6% in 2016. Activity in the mining and quarrying sector notably gained momentum (+5.9% y/y) in the year after its negative performance during 2015-2016. Onshore and particularly offshore upstream operations have strengthened amid investors’ rising interest and higher natural gas prices.
As regards the specific industries performing best in 2017, above-average growth was seen in the sectors of electric equipment (+27.2% y/y), production of road transport means (cars, lorries, trucks +15.7% y/y) and other machinery and equipment (+33.6% y/y). The pharmaceutical industry also produced 17.3% y/y more. The food industry upped output by a modest 1.1% y/y while beverage production picked up a bit more (+3.5% y/y).