Romania's manufacturing activity stagnates in June - Erste

"Even though there are signs of recovery for Romanian manufacturing, there are still factors, most of them external, limiting the pace and consistency of economic activity growth," Erste Group said in a press release.

The PMI is a weighted average of five indices related to the manufacturing industry in Romania. These indices include new orders, output, employment, suppliers' delivery times, and stocks of purchases.

In June, employment, output, and stocks of purchases had a negative contribution on the PMI, which was leveled off by a positive contribution from new orders and suppliers’ delivery times, leading to a flat overall reading after two months of expansion. New orders remaining positive suggests that there is still strong demand, which should lead to more positive headline PMI readings in the future, Erste noted.

"The BCR Romania Manufacturing PMI correctly captured the negative contribution of industrial sector to the GDP growth in Q1 2024. Industry had a -0.2pp contribution to the +0.1% y/y GDP growth in the first quarter of 2024. PMI data for the second quarter points to a positive contribution from industry to the overall domestic output as the average index stood in expansionary territory, at 51.2," Erste said.

Romania's manufacturing PMI was launched earlier this year by Banca Comerciala Romana (BCR), the Romanian unit of Erste. The PMI is released on the first working day of each month and is compiled by S&P Global, which started sending out questionnaires to purchasing managers of about 400 manufacturers last year.

BCR's consolidated net profit rose 10.1% year-on-year in the first three months of 2024, reaching 620 million lei ($134 million/124.6 million euro).

BCR Group comprises lenders Banca Comerciala Romana and BCR Banca pentru Locuinte as well as BCR Pensii, BCR Leasing IFN and BCR Chisinau.

Erste Group's shares traded 1.59% higher at 223 lei as at 1232 CET on Monday on the Bucharest Stock Exchange.

(1 euro=4.977 lei)