Industry Trend Analysis - Labour Cost Increase Will Not Deter Production Rebound - MAY 2017
BMI View: Romania retains its competitive advantage among CEE states for vehicle production because of its attractive labour market , even after recent labour cost increase s , and its production growth opportunit ies given that it is growing from a low base. T he country ' s weak logistics network will , however, remain a risk to growth .
Romania will retain its competitive advantage in vehicle production compared with its vehicle producing peers in Central and Eastern Europe (CEE), even after recent labour cost increases. On February 1, the new minimum wage was introduced and social health contribution limits were removed, resulting in an increase in labour costs, which feeds into production costs for vehicles. Despite this, Romania remains attractive because labour costs are still low relative to neighbouring markets and low production levels indicate opportunities for growth.
Production Growth Rebound Will Continue
|Growth Will Continue To Improve As Opportunities Are Realised|
|Romania - Vehicle Production, Units And Growth|
|e/f = BMI estimate/forecast. Source: National sources, BMI|