Romania’s resilient construction sector slows down in April-May

The volume of construction works in Romania rose by 11.6% year-on-year in May, similarly to April. However, the construction sector's growth rate slowed down significantly compared to the 12 months preceding the coronavirus (COVID-19) pandemic.

The volume of construction works in the 12 months ending March 2020 was 31% higher compared to the previous 12-month period.

The civil engineering works (public infrastructure projects) segment showed the highest resilience to the pandemic crisis and remained the main growth driver. It posted a 26.5% year-on-year advance in May, slightly down from April but significantly above the 24% average growth in the pre-pandemic 12-month period.

The civil engineering segment is supposed to drive the growth not only for the construction sector but also for the whole economy, under the Government's ambitious investment strategy.

The residential segment also demonstrated resilience and grew by 12.0% year-on-year in May, down from 19.2% year-on-year advance in April and 24% year-on-year growth in the pre-pandemic period. However, this segment had increased sharply during the previous years and still boasts intense activity despite the slower annual growth rate.

The non-residential segment, including sub-segments hit by the crisis (commercial, office) as well as others that are enjoying a robust outlook (logistics), had the worst performances. The works in this segment contracted by 6.6% year-on-year in May after the 11.1% annual decline in April.

In the pre-pandemic 12-month period, the segment boasted the strongest growth, 49% year-on-year, which partly laid the grounds for high-base effects resulting in negative growth rates in April-May. Projects in this segment are likely to be put on hold until investors regain their confidence.

(Photo: Alakoo | Dreamstime.com)