Overview Romania has been successful in developing dynamic telecommunications, aerospace, and weapons sectors. Industry and construction accounted for 32% of gross domestic product (GDP) in 2018, a comparatively large share even without taking into account related services. The sector employed 26.4% of the workforce. With the manufacture of over 600,000 vehicles in 2018, Romania was Europe's sixth largest producer of automobiles. Dacia is producing more than 1,000,000 cars a year (with 1 factory in Morocco).
In 2018 Romania enjoyed one of the largest world market share in machine tools (5.3%). Romanian-based companies such as Automobile Dacia, Ford, Petrom, Rompetrol and Bitdefender are well known throughout Europe. However, small- to medium-sized manufacturing firms still form bulk of the manufacturing sector. These firms employ two-thirds of the Romanian workforce.
Romania's industrial output is expected to advance 7% in 2018, while agriculture output is projected to grow 12%. Final consumption is also expected to increase by 11% overall – individual consumption by 14.4% and collective consumption by 10.4%. Domestic demand is expected to go up 12.7%.
The growth of the industrial sector was the principal stimulus to economic development. In 2018 manufacturing industries accounted for approximately 35 percent of the gross domestic product and 29 percent of the work force. Benefiting from strong domestic encouragement and foreign aid, Bucharest's industrialists introduced modern technologies into outmoded or newly built facilities at a rapid pace, increased the production of commodities—especially those for sale in foreign markets—and plowed the proceeds back into further industrial expansion. As a result, industry is expected to grow by 7.1% in 2018.
Heavy industries generally were located in the south of the country. Factories in Bucharest contributed over 25 percent of all manufacturing value-added in 2018; taken together with factories in surrounding Ilfov, factories in the Bucharest area produced 26 percent of all manufacturing that year. Factories in Bucharest employed 18 percent of the nation's 3.1 million factory workers.
Construction
Construction activity (about 10% of GDP) has increased due to recent tax incentives. Romania is becoming an increasingly popular choice for British property investors, according to recent research from Currencies Direct. The latest Global Emerging Markets Index from the foreign exchange company shows that Romania has made the top ten for the first time, reaching number nine. The monthly index is based on the number of foreign exchange transfers undertaken by the firm to emerging market regions for property purchases. According to Currencies Direct, Romania has seen significant increases in house prices in recent years and its interest rate has dropped from a level of 154 per cent in 1997 to 8.9 per cent in 2005.
The construction industry in Romania contributed an estimated 5.95% in 2006 to the country's gross domestic product (GDP). Business Monitor International released Romania Infrastructure Report Q2 2007 in which they forecast an average industry growth rate of 6.84% over the 2007–2011 period.
The construction industry has been receiving funds from foreign institutions including European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB). Furthermore, the Romanian Ministry of Environment and Water Management is making efforts to align the Romanian environment standards with the European standards. One of the ongoing projects in the country is the construction work on the various sections of the Bucharest-Brasov motorway. An increasing number of foreign companies are showing interest in electrical production capacities in the country. Companies include Germany's Siemens, U.S-based AES Corporation and Geneva-based Societe Bancaire Private.
However, the construction industry is subject to a number of risks, which can affect its growth. The rising budgetary deficit, for example, has had an increasingly adverse impact on the availability of funds for the infrastructure sector.
Despite the drawbacks, BMI ranked Romania 12th out of the 13 states included from the Emerging Europe for the infrastructure business environment. The construction industry is forecast to reach a value of RON36.2bn (US$13.41bn) by 2011, from an estimated RON20.88bn (US$7.43bn) in 2006.
Companies
Manufacturing The general pattern of development for wealthy nations was a transition from a primary industry-based economy to a manufacturing-based one, and then to a service-based economy. Romania did not follow this pattern, manufacturing has always been secondary, though certainly not unimportant. In part because of this, Romania did not suffer as greatly from the pains of deindustrialization in the 1970s and 1980s. Manufacturers have been attracted to Romania due to the highly educated population with lower labour costs than the EU. Romania's government-run healthcare system is also an important attraction, as it exempts companies from the high health insurance costs they must pay in the EU. Romania is also perceived as a dynamic market for machine tools, especially in the backdrop of growth in the domestic automobile and mechanical engineering sectors. Romanian machine tool exports abroad have been growing at double digit figure since 2002. Moreover, Romanian exports saw an increase of 23 percent in the first half of 2007 compared to the same period last year. The exports comprised mainly machining centres, grinding, honing, lapping machines, gear cutting machines, lathes and milling machines, presses and other metal forming machine tools.
Car manufacturing
Much of the Romanian manufacturing industry consists of branch plants of EU firms, though there are some important domestic manufacturers, such as Dacia, Roman Braşov, Igero.
Ford bought Daewoo Romania company for €57 million to produce Ford automobiles to a car production estimated to be over 300,000 by 2010. Ford will invest €675 million (US$923 million) in the former Daewoo car factory. Ford also said it would buy supplies from the Romanian market worth €1 billion (US$1.39 billion).Reuters | Latest Financial News / Full News Coverage
The Dacia Logan was the top-selling new car in Central and Eastern Europe in the first half of 2007 with 52,750 units sold, ahead of Škoda Fabia (41,227 units), Škoda Octavia (33,483 units), Opel Astra (16,442 units) and Ford Focus (14,909 units), shows a market survey of JATO Dynamics, a supplier of automotive market intelligence.
Automobiles Total number of cars: 4,908,885 Cars per 1,000 capita: 166
In 2013, the Romanian automotive industry ranks fourth in Central and Eastern Europe, behind that of the Czech Republic, Slovakia, and Poland, with a total car production of 410,997 units.
In Romania are produced a wide range of automobiles, minivans, sport utility vehicles, buses, and trucks. In 2007 Romania exported US$3.7 billion worth of vehicles and components. The vehicle export was 120,000 units in 2007. It was expected for 2008 to export about 250,000 units. The vehicle and component export is targeted to reach US$20 billion by 2010. Dacia Logan was the top-selling new car in Central and Eastern Europe in the first half of 2007 with 52,750 units sold, ahead of Škoda Fabia (41,227 units), Škoda Octavia (33,483 units), Opel Astra (16,442 units) and Ford Focus (14,909 units).
High technology
Romania planners realized that the country needed to advance quickly in such areas as high technology if the economy were to grow while matching foreign competition. In 1997 the Romania Development Institute issued a report, Romania Year 2000, that profiled Romania economic development in 2000. The Romania Development Institute noted that the industrial structure would be highly developed and would resemble that of advanced countries inasmuch as high value-added industries, high-technology industries, and soft industries grew relatively rapidly. Further, changes in industrial structure were expected rapidly to reduce the demand for unskilled workers while simultaneously increasing the demand for professional and technical manpower, resulting in further change of the employment structure.
The Romania Development Institute also noted that the Ministry of Science and Technology had prepared a long-range plan of science and technology for the twenty-first century that took into account limited available resources. Accordingly, Romania selected its comparative advantage areas, including informatics—particularly information storage and retrieval and electronic data processing, fine chemicals, and precision machinery in the short term; biotechnology and new materials in the mid-term; public benefit areas, such as the environment, health, and welfare, as another group; and oceanography and aeronautics for the medium and long term.
In 2000 Romania announced an ambitious plan to promote science and technology so that high-technology activities would dominate the economy by the year 2007. The Ministry of Science and Technology intended to coordinate technology-related projects between government and industry in a variety of fields including semiconductors, computers, chemistry, and new materials.
Information technology IT Sector
Romania is one of the most attractive markets in Europe for technology investment and outsourcing, with a highly skilled and diversified workforce, competitive prices, and a stimulating business environment with a sector worth as 40 billion EUR. Romania's IT sector has seen continuous growth over the past decade, despite political turbulence and the economic crisis, which is a good indicator of its driving force. Known for their broad technical expertise, their flexibility, enthusiasm and excellent language skills, Romania's software service providers are a great choice for long-term collaborations in both nearshoring and offshoring businesses.
Romania is one of the fastest-growing information technology (IT) markets in Central and Eastern Europe. The country has made significant progress in all of the information and communications technology (ICT) subsectors, including basic telephony, mobile telephony, the Internet and IT. The country's telecoms sector has been deregulated, expanded and modernised over the past 15 years.
Leader in Europe
Romania is the leader in Europe, and sixth in the world, in terms of the number of certified IT specialists, with density rates per 1,000 inhabitants greater than in the US or Russia. There are about 100,000 specialists in the IT sector. Approximately 15,000 of the 40,000 engineers graduating every year in Romania are trained in ICT.E-readiness: Romania Microsoft acquired Romanian Antivirus Technology in 2003. According to Microsoft, Romania has a clear potential in information technology, an area in which Romanian students, researchers and entrepreneurs excel. Its western-oriented culture and the high educational degree of its youth bring Romania forward as a huge potential market (the second largest software producer in Eastern Europe). In terms of IT outsourcing services Romania is ranked in the third place worldwide successfully challenging India.