BCR Romania Manufacturing PMI falls to seven-month low as conditions for Romanian manufacturers deteriorate in September
Output and new orders down at fastest rates since February - Survey-record drop in payroll numbers, while confidence dips - Below average input and output price inflation signalled
- Output and new orders down at fastest rates since February
- Survey-record drop in payroll numbers, while confidence dips
- Below average input and output price inflation signalled
The manufacturing sector in Romania remained under pressure in September, as operating conditions deteriorated at the most pronounced rate seen since February. Subdued demand conditions played a large part in the sustained downturn.
Both incoming new orders and production volumes fell at accelerated rates in September. Most notably perhaps, staffing levels decreased at a survey-record pace. On a slightly more positive note, panellists frequently linked the decrease in workforce numbers to voluntary leavers, and less so firm-instigated job cuts.
Owing to weak demand for inputs, cost pressures were at their softest since December last year and charge inflation was only marginal.
The headline BCR Romania Manufacturing PMI® is a composite single-figure indicator of manufacturing performance derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
A PMI reading above the 50.0 no-change mark signals an improvement in the health of the sector over the month, while a figure below 50.0 points to a deterioration.
At 47.3 in September, down from 48.4 in August, the headline reading posted in contraction territory for a third month in a row.
Four of the five PMI components imparted negative directional influences in September. Stocks of purchases bucked the wider trend, but nevertheless recorded a contraction.
The main downward pressure came from re-accelerations in the rates of decline in manufacturing output and new orders, both of which fell at the quickest rates seen since February. Panellists blamed subdued demand conditions, in part due to constrained customer budgets. In line with the trend for total new orders, export sales fell at a sharper rate on the month.
Meanwhile, factory workforce levels declined at the fastest rate on record in September. Anecdotal evidence suggested that job losses often reflected voluntary leavers, with some mentions of aligning employment levels with workloads. At the same time, manufacturers were still able to deplete the number of orders pending completion, though at a slightly slower pace than in August.
On the buying front, the latest survey data pointed to a further decrease in the quantities of inputs purchased. The decline in September was only modest, however, and the slowest of the third quarter. Meanwhile, input stocks fell again, but at a softer rate on the month.
