Romania’s still robust construction sector keeps losing steam

Romania's construction volume index increased by 10% year-on-year in the second quarter of the year (Q2), in contrast to the broad economic slowdown, the statistics office INS announced.

But even this sector, which owes its resilience to its insulation from the shrinking foreign trade flows and broken production chains, shows signs of fatigue. The annual growth rate has decelerated from 34% year-on-year in Q1. Furthermore, the short-term series reveals visible deceleration during Q2 from 11.4% in April to 8.1% in June.

The segments that prompted the slowdown in recent months are visibly those of retail and office. This reflected in the figures released by INS: the construction of no-residential buildings contracted by 11.1% year-on-year in April and by 6.7% in May to recover in June (+11.1%). The logistics segment most likely provided the impetus and will be the non-residential segment's driving force.

Overall, in Q2, the volume of works in the non-residential segment contracted by 2.8% year-on-year, and this made it the sole segment with negative annual performance. Residential construction works were up 15.4% year-on-year, and the civil engineering works were up 16.9%.

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