Romania’s construction activity index up 12.2% y/y in Q1, largely on base effects

Romania’s construction works volume index surged by 12.2% y/y in Q1 – a performance largely owed to low base effects and the seasonally low activity in the first quarter of the year, according to the statistics office INS.

The sector is among the few that propped the overall economic growth in Q1, estimated by the statistics office at +0.2% y/y in Q1.

For the entire year, the government expects the infrastructure projects to boost construction activity – but this largely depends on the absorption of EU funds under the Resilience Facility and the cohesion budget. Public investments from the national budget are likely to be under pressure in the context of fiscal tightness.

By type of construction, engineering works - representing approximately 45% of the market - posted the strongest growth at 18.9% y/y. The five-year advance was also the most impressive, namely +52% (+8.7% y/y per year on average).

Residential construction, which accounts for 27% of the market, increased by 11.1% y/y, while non-residential buildings, comprising 28% of total output, grew by just 2.0% y/y. The five-year advance rates were +13.7% and +5.1% respectively. The volume of residential construction work thus increased by just over 1% per year, over the past five years.

By category of works, the largest segment (new constructions, 69% of total market) advanced by 9.9% y/y. The relatively smaller segment of capital repairs (9% of total market) surged by 60% y/y and the current repair works (23% of total market) generated 4.1% y/y less activity.

(Photo source: Yury Sevryuk/Dreamstime.com)