Romania’s manufacturing sector showed signs of stabilisation in August as the Manufacturing Purchasing Managers’ Index (PMI, chart) compiled by Banca Comercială Română (BCR) reached 49.3, its highest level in 14 months, Erste Group reported on September 2. Despite the improvement, the index remained below the neutral 50 threshold for the fifteenth consecutive month, signalling ongoing contraction.

The slight recovery was driven by a softer decline in new orders, though the indicator stayed in negative territory. The only positive contribution came from supplier delivery times, according to Erste Group. Analysts noted that the stabilisation of demand was largely due to domestic factors, while export orders showed little change compared with July.

At the European level, the HCOB Flash Eurozone Composite PMI increased to 51.1 in August from 50.9 in July, marking its third consecutive monthly improvement and the strongest reading since May 2024. The index has been supported by large-scale fiscal measures in Germany, particularly infrastructure and defence spending, as well as significant investments in European security.

In Romania, however, the outlook for industrial production remains subdued. Erste Group analysts cautioned that manufacturing activity in the first half of 2025 had been weak, leaving little room for a rebound. “The second half of the year needs to be very strong in order to avoid the third consecutive year of contraction,” the analysts said.

Official data from the National Institute of Statistics confirmed a quarterly increase in manufacturing output in the second quarter of 2025, consistent with the recent PMI signal. On a 12-month rolling basis, however, output declined by 1.9% year-on-year as of June.

Future business expectations among Romanian manufacturers fell to a new historical low in August, with higher taxes and broader economic challenges weighing on sentiment. Despite this, the expectations index remained above the 50 mark, suggesting cautious optimism in the longer term.