Romania's construction market up in Jan-Feb, infrastructure works lag behind

The construction works index, broadly reflecting the activity of the construction companies in Romania, increased by 10.6% in February (year-on-year) compared to the same month last year while the aggregate growth rate for January-February period was 4.7% year-on-year.

The data are however far from signaling a significant improvement in the market as a whole while particular segments in the first-tier cities are doing much better than average.

The higher volume of works reported this year was mainly due to the higher number of working days since the construction volume index adjusted for the number of working days contracted by 1.1% year-on-year in January-February. The activity in the sector is generally subdued in January-February, hence the annual performance is not particularly relevant for the full-year dynamics (last year 5.6% advance in Jan-Feb preceded negative 4.1% performance in full year).

The volume of engineering works plunged by 9.4% year-on-year (unadjusted data) in the first two months of the year. Delays in budget law endorsement put on ice infrastructure and other projects managed by the central and local administration, pushing down this segment of the construction market, but the recovery after the budget planning endorsement depends on the absorption of EU funds since the fiscal space for investments in the national budget is abruptly shrinking.

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