Romania‘s manufacturing sector moved closer to stabilisation in May, according to the latest BCR Romania Manufacturing PMI compiled by S&P Global.
The headline index rose to 48.3 in May from 47.5 in April, the index showed, with the data pointing to a slower pace of contraction and early signs that conditions may be improving after a difficult start to the year.
Continued improvement
“The BCR Romania Manufacturing PMI rose to 48.3 in May from 47.5 in April, marking a third consecutive month of improvement from its all-time low reached in February,” commented Ciprian Dascalu, chief economist at BCR. “Although the index still points to a contraction in manufacturing activity, the continued upward trend is encouraging and may indicate that growth momentum is beginning to build in the domestic manufacturing sector.”
According to the report, softer declines in output and new orders helped improve overall business conditions, while employment and purchasing activity fell only marginally.
However, manufacturers continued to report subdued domestic and export demand amid elevated inflation, tight customer budgets and broader economic instability. Export orders returned to contraction territory after briefly improving in April, reflecting weaker international demand and softer conditions in European markets.
Output also remained under pressure, though the pace of decline slowed to its weakest level in eight months. Companies cited high input costs, supply disruptions and ongoing geopolitical uncertainty as key challenges affecting production.
Middle East impact
Survey respondents also pointed to the impact of the conflict in the Middle East on supply chains and energy markets. Delivery delays and higher costs for oil-related inputs and transport continued to contribute to elevated inflationary pressures across the sector.
Despite this, both input cost inflation and output price inflation eased for a second consecutive month, suggesting that the earlier fuel price shock may be beginning to fade.
Employment levels were broadly stable in May, with only a slight reduction in staffing numbers. Purchasing activity also declined only fractionally, marking a significant improvement compared with the sharper cutbacks seen earlier this year.
“Apart from suppliers’ delivery times, all components made a positive directional contribution this month, with output providing the most significant boost,” Dascalu added. “Both input and output prices showed a relative easing in the pace of growth this month, marking a second consecutive slowdown and suggesting that the fuel price shock is fading.” Read more here.
