Romania’s construction industry still in decline

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.