In April, the index went up to 51.5 from 49.3 in March, its highest value so far. For the first time since data collection began in July 2023, the panelists reported an improvement in business conditions in the sector compared with the previous month. Both new orders and output components came above 50 this month – indicating an improvement after nine consecutive months of decline and were the main growth drivers for the PMI reading. All components except the suppliers’ delivery times had a positive directional contribution in April.
“Goods producers were increasingly optimistic that output would rise over the year ahead, with firms expecting market conditions to improve and geopolitical tensions to ease. In fact, excluding the opening month of the survey in July 2023, the degree of positive sentiment was the strongest on record so far,” a Standard & Poor’s release says.
Romanian manufacturing was significantly affected by the high inflationary episode over the past couple of years and National Institute of Statistics data shows the output for manufacturing sector contracting in 2023 compared with the previous year by 2.%.
PMI signals that a slight recovery might be on the way starting from the second quarter, though additional data is required to confirm this scenario.
“Based on PMI data for the first quarter we can assume that manufacturing will not be a contributing factor for the economic growth in the first three months of the year but that might not be the case for the second quarter. Manufacturing accounts for around 15% to 20% of the gross value added in Romania,” the report published by Erste said.
(English version by Loredana Fratila-Cristescu)