Romania's manufacturing contraction slowed in March, but cost pressures persist

Investing.com – Based on data released by BCR and S&P Global on Wednesday, Romania’s manufacturing sector saw a slowing contraction in March, with BCR Romania Manufacturing PMI rising from a record low of 45.3 in February to 46.6.

The March reading marked the second-strongest downturn in 14 months, with improvements across output, new orders, employment, purchasing and inventories compared with the previous month.

Total new business and export orders continued to decline in March, but the rate of decline was weaker than in February. With budgets constrained and uncertainty driven by the conflict in the Middle East, clients remained reluctant to spend. Production fell for the 22nd consecutive month, though the pace of contraction eased.

Job cuts continued, but not as markedly as in February’s survey record. Manufacturers again reduced purchasing levels and inventories, but the declines were slower than in the previous month.

Input costs surged sharply due to the conflict in the Middle East, with inflation reaching the second-highest level since records began. Panel members reported that costs for raw materials, transportation and energy rose as suppliers increased their charges. As firms passed some costs on to customers, factory gate prices rose at the fastest pace in five months.

Supply-chain disruptions remained relatively mild, with only a slight extension of delivery times recorded.

Business confidence for the next 12 months remained positive, but fell further below the long-term average. Due to the conflict in the Middle East, firms expressed concerns about future demand conditions and inflation outlooks.

The Q1 PMI average was 46.7, below 47.9 in Q4 2025. Industrial production in January fell 3.3% month-on-month, after having contracted for three straight years.

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