Industrial output increased by 12.2% y/y in December, accelerating from the 9.9% y/y (revised from 9.5%) rise in November, according to preliminary data published by the statistical institute today (all prints in sa terms). The industrial output sped up its growth in the last month of 2017 even if sales moderated in the month, most probably over a better mood regarding the sector’s future developments.
Generally, the industrial output moderately increased last year, mainly sustained by the manufacturing sector. The index reported growth fluctuations throughout the year, which mostly followed the external demand developments. The domestic demand came with some more visible positive influence on the index performance in the last months of 2017, when the better EU funds absorption fuelled some improvements in construction. Looking ahead, the industry will likely continue to remain strongly linked to the external developments, mainly in Romania’s major trading partners in the EU. The local mood is still in the gloomy area due to political uncertainties and fiscal risks, affecting the economic activity. However, the manufacturing sub-segments that supply construction goods and materials might improve performance this year, as investments and EU funds absorption are expected to revive.