Romania’s construction works down 4.8% year-on-year in January

Romania’s construction works index contracted by 4.8% year-on-year in January 2019, the National Statistics Institute (INS) informed.

The fiscal stimulus received this year should provide certain impetus to the sector that had contracted by a combined 13.5% over the previous three years. Seasonally, the construction activity in January is subdued (4.4% of full year’s activity in 2018). Therefore the impact on full year’s performance is of smaller magnitude.

The volume of works in civil engineering contracted by 10.8% year-on-year in January (after the 8.0% increase in 2018 on average), which might be a result of late budget promulgation but also a high base effect: this market segment increased by 19% year-on-year in January 2018.

On the other hand, the civil engineering segment retains robust growth potential, as large infrastructure projects eventually kick off.

Another segment holding great growth potential is that of the non-residential buildings, where the demand for office spaces remain high in first-tier cities. The segment, however, contracted by 9% year-on-year in January after two years of decline.

The residential building segment depends significantly on the lending and households’ sentiment, which makes it particularly volatile at present. The segment boasted massive expansion in 2017 to lose momentum in 2018, but it strengthened again in December and furthermore in January when it expanded by 10% year-on-year.

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