Romania’s industrial output contracted by 2.8% q/q in seasonally and workday-adjusted terms and by 1.9% y/y in the first quarter of 2026, according to data published by the statistics office INS.

The manufacturing sector posted an even weaker performance, shrinking by 3.8% q/q and 3.3% y/y during the January-March period.

The latest figures indicate a return to the longer-term downward trend in Romanian industry after a temporary rebound recorded during the final three quarters of 2025 (chart). Industrial activity remains under pressure from subdued domestic demand, fiscal consolidation measures and weaker regional economic conditions.

Despite the weak quarterly performance, analysts continue to see prospects for gradual stabilisation later this year, supported by investments and expectations of stronger regional economic activity once geopolitical tensions ease.

Erste Research said it still expects 2026 to bring a marginal expansion in industrial production after three consecutive years of contraction.

Separately, the BCR Romania Manufacturing PMI improved for the second consecutive month in April, with the headline index rising to 47.5 from 46.6 in March. Although the reading remained below the 50-point threshold separating growth from contraction, it pointed to a slower pace of decline in manufacturing activity.

According to the PMI survey, most components contributed positively to the monthly improvement, except for stocks of purchases, which had a broadly neutral impact.

The survey also indicated that input and output prices continued to rise at a slower pace in April despite the ongoing conflict in the Middle East and elevated energy market volatility.

Romania’s broader economic outlook has weakened in recent months. Flash GDP data published by INS showed the economy contracted by 0.2% q/q and 1.7% y/y in Q1, while retail sales and real wages also remained under pressure amid elevated inflation and political uncertainty.