Page 46 - bne IntelliNews SE Outlook Regions 2024

The annual decline was 4.6% y/y in each of the second and third quarters of the year. It sweetened slightly in October to 2.3% y/y but this doesn’t change the overall picture.
The government expects industry to bottom out in 2024 and post significant growth rates in the years to come: +3.5% in 2025 and +4.2% in 2026. The value added generated by the sector is expected to advance slightly faster given the shift of industrial structure towards higher value-added industries.
This remains a scenario supported at this moment only by hopes for large infrastructure projects providing an impetus to horizontal industries. The Recovery and Resilience Facility money and other projects, such as Neptun Deep offshore, are the sole relevant drivers at this moment when Europe’s economy is not thriving.
The industries that lost ground at a high rate are many, like the reasons behind them: coal mining (decarbonisation), light industry (rising wages), chemistry (expensive natural gas), metallurgy (expensive energy), wood processing (tighter regulations) and even construction materials (decelerating residential real estate development).
Very few industries posted notable growth rates: the automobile industry, manufacturing of electronic and optical devices (partly for the automotive industry), food and beverages (rising domestic demand) and the tobacco industry (the most resilient industry so far).
Industrial prices in Romania increased by 2.4% in September-October 2023, after they plunged by 6.1% during February-June and stayed flat during the summer, according to the statistics office INS.
Energy prices remain the major driver and they increased by 5.3% m/m in September.
Energy prices are still 4% below the peak levels reached in January-March 2023, but they stabilised at a high level rather than further dropping towards the “old normal”. The prolongation of the war in Ukraine and the complications in the Middle East are not supportive of lowering energy prices soon, with a negative impact on consumer price inflation and capacity utilisation in industry.
46 SE Outlook 2024 www.intellinews.com