Romania’s construction industry still in decline

07 May 2014

The Romanian construction industry has just suffered its fifth year of construction output decline, according to market research firm PMR.

After the double-digit declines in construction output in 2009 and 2010, Romania maintained its downward trend in 2011, followed by a drop of 5.8% in 2012 and a further decrease of 0.6% last year.

PMR’s latest report, Construction Sector in Romania 2014 - Development Forecasts for 2014 to 2019, shows that last year’s drop was largely a result of a weak performance in the non-residential construction segment, which fell year-on-year by 7.5%.

However, the residential sector did rally with a 5.4% increase in construction output, while the civil engineering construction segment saw modest growth with a 1.4% increase.

One reason for the decline, according to PMR, is the lack of new construction. According to preliminary data, new construction output tumbled 9.4% last year, particularly thanks to the public sector, which prioritised repair and modernisation projects.

According to the National Institute of Statistics, the residential segment increased 5.4% last year. However, preliminary data reveals that the number of completed homes continued to decrease in 2013 by 9%, reaching 40,071, after a 3.1% decline recorded a year earlier. This figure brought the market down to pre-2007 levels.

The civil engineering segment was driven by transport infrastructure construction projects implemented with financial support from the EU. In recent years, more than 60% of annual spending on road projects has been channelled towards the development of the country’s national road network.

In 2013, the National Company of Motorways & National Roads in Romania (CNADNR) allocated RON3.8 billion (€851 million) for the development of the country’s motorway network. During the year 116 km of motorways were activated in Romania.

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