Romania’s industrial production (chart) contracted by 4.0% y/y in January, driven mainly by a 6.4% y/y drop in manufacturing output, according to data published by the statistics office INS. The decline in manufacturing was partly offset by stronger activity in the utilities sector, where output increased by 8.6% y/y, while mining and quarrying decreased by 2.0% y/y.

In seasonally adjusted terms, industrial output fell by 3.3% m/m compared to December, mainly due to a 5.1% m/m contraction in manufacturing industries.

As a result, seasonally adjusted industrial activity in January reached its lowest level in nearly five years, since the lockdown period in 2020.

The outlook for February indicates further deterioration. The Manufacturing PMI index (chart) calculated by BCR, a subsidiary of Erste Group, continued to decline in January and February after a temporary improvement in December that had still left the index in contraction territory. The indicator dropped to 45.8 points in February on a 0–100 scale, the lowest level recorded so far. The sharpest negative contributions came from new orders and output, while suppliers’ delivery times remained broadly neutral. The continued weakness in domestic demand raises concerns about the near-term outlook for Romania’s manufacturing sector.

The January decline affected not only structurally vulnerable industries. Output in the chemical industry plunged by 19.5% y/y and metallurgy contracted by 8.7% y/y, sectors that have been under pressure for some time due to high energy costs. The automotive industry also continued its negative trend (having already declined by 4.6% in 2025), posting a further 5.7% y/y contraction in January.

The oil refining sector, which had grown by 3.9% in 2025, recorded a sharp 16.8% y/y decline as the Petrotel Lukoil refinery was not in operation. Rubber and plastic manufacturing, a sector hosting several major global tyre producers and which had expanded by 0.6% in 2025, also contracted by 8.4% y/y.

Industries that had shown relatively robust performance in the past remained on the positive side but slowed considerably. Food manufacturing increased by only 0.8% y/y and pharmaceuticals by 0.3% y/y.

By contrast, machinery and equipment production recorded a strong 9.8% y/y increase in January despite a modest 1.6% contraction in 2025. Clothing manufacturing, a sector that has steadily lost importance in Romania’s industry and had contracted by 15.1% in 2025, posted a temporary 7.7% y/y increase in January without yet signalling a sustained recovery.