Manufacturing continued to be the weak link in May, falling 5.2% year-on-year, according to statistics released this morning. “We believe that industrial production will be negative in 2023 for the second year in a row. Export-oriented manufacturing fell by 3.5%, BCR economists said in a report to investors.

According to the same paper, the trust scores don’t look good. HCOB Eurozone Manufacturing PMI shows decline in eurozone manufacturing deepened in June The manufacturing component of the Ifo business climate index for Germany has worsened significantly in recent months, with expectations showing a particularly sharp decline.

“The statistics confirm the persistence of a difficult climate at the level of the national industry in the fifth month of the current year against the background of corrections in the economy of the Eurozone (the main economic partner) and high levels of financing costs and uncertainty,” Banca Transilvania Chief Economist Andrei Redulescu also notes.

The evolution was determined by the decline registered at the level of energy and utilities (by 3.6% month/month) and industry (with a monthly rate of 0.8%), but, on the other hand, at the level of the extractive industry, production increased by 3.3 % month/month in May.

Industrial production in Romania contracted for the seventh month in a row in May, but at a slower pace to 4.8%, according to BT analysis.

• The components of industry and energy and utilities recorded annual rate adjustments of 4.3% and 12.3%, respectively, in May.

• At the opposite pole, the mining industry grew by 5.6% y/y in May.

• Analysis of the major industrial groups highlighted the growth in the capital goods component for the fifth consecutive month in May, with the annual pace accelerating to 2.8% in May, the highest level since March.

• The production of durable goods fell for the 14th month in a row in May, but with a softening of the annual pace to 14.9%.

• Also, in May, the production of intermediate goods was adjusted for the 12th month in a row, with a decrease in pace to 8.3%.

• Thus, between January and May 2023, industrial production in Romania fell by 4.7% y/y, driven by a worsening climate in the Eurozone and high levels of financing costs and uncertainty.

• A drop in production in the industrial sector by 3.9% y/y was highlighted. • Also, in the first five months of 2023, the energy and utilities component decreased by 11.6% y/y.

• The analysis of major industry groups highlights an average 6.4% year-on-year increase in capital goods production between January and May 2023, indicating a continuation of the post-pandemic investment cycle.

• In contrast, production of intermediate goods and production of durable goods fell at average annual rates of 11.7% and 18.7%, respectively.

• The most dynamic branches of the processing industry in January-May 2023 were: production of coke chemical products and crude oil processing products (2.0% year/year), pharmaceuticals (6.5% year/year), machines, machines and equipment ( 8, 1% y/y), road vehicles, trailers and semi-trailers (9.0% y/y) and computers and electronic and optical products (11.2% y/y).