Romania’s industry maintains sluggish growth in April

Romania’s industry maintains sluggish growth in April
By Iulian Ernst in Bucharest June 14, 2019

Romania’s industrial production increased by nearly 1.5% y/y in April, accelerating from the modest 0.6% y/y advance in Q1 but remaining far from the 5.2% figure envisaged by the government when forecasting the 5.5% GDP growth this year.

Furthermore, the annual advance of the production index was only 1.4% in the core manufacturing industries while the activity in the mining and quarrying sector rose by 7.8% y/y on a low base.

In the rolling 12 months ending April, the industrial output increased by 2.2% y/y, at a rate that eased from 3.5% at the end of 2018 and 7.2% at the end of 2017. It remains unclear what would propel the figure up to 5.2% at the end of this year.

New industries have emerged as growth drivers in recent months, while the automotive industry  maintains its leading role in the industrial growth.

The automotive industry kept rising at a fast pace of 11.5% y/y in the rolling past 12 months (while rising by only 0.1% y/y in April), surpassed only by electrical equipment production (+12% in the rolling 12-month period, but -0.3% y/y in April). Production of non-metallic mineral products (cement, adhesives as well as glass and other construction materials) advanced by a significant rate of 9.3% y/y (+5.1% y/y in April). The production of food and non-alcoholic beverages keep growing at modest rates of 1.3% and 0.3% respectively in the 12-month rolling period, despite a substantial rise in consumption.

In April alone, neither the automotive nor the electrical equipment industries outperformed. The growth was supported, instead, by crude refining (+21.5% y/y) and pharmaceuticals (+15.2% y/y) while the food industry posted an outstanding 9% annual advance as well. New drivers such as chemistry, petrochemistry and food production could support government’s hopes for 5.2% industrial growth this year, but the April figures alone are not sufficient.