Romania's manufacturing PMI peaks in May - Erste

The second reading above the 50 mark, which separates growth from contraction, indicates improvement in business activity and shows clear signs of recovery in the Romanian manufacturing sector, with new orders and output being the main positive drivers in May, Erste said in a press release.

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.

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.

"New orders and output remained above 50 and were the main drivers for this month’s reading. Employment remained in expansionary territory but had a negative directional contribution this month, as the reading came in below previous month. The only other negative directional contribution in May came from stocks of purchases, though holding a small weight, the effect on the headline PMI is only marginal," Ciprian Dascalu, chief economist at BCR, said.

Romania's manufacturing sector may contribute positively to the country's economic growth in the second quarter of 2024, as indicated by the first two readings of the trimester, Erste noted.

BCR's consolidated net profit rose 10.1% year-on-year in the first three months of 2024, reaching 620 million lei ($135 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 1.33% higher at 228 lei as at 1538 CET on Monday on the Bucharest bourse.

(1 euro=4.9761 lei)