Romania’s January construction figures show worst month in four years

Romania’s construction works index plunged by 14.8% y/y in January, and, in seasonally and workday adjusted terms, it reached the lowest value in more than four years, according to data published by the statistics office INS.

The unusual and unexpected strong contraction was not anticipated by factors like adverse weather or a sharp increase in the price of inputs.

The plunge concentrated in the segments of residential construction works (-53.1% y/y) by type of project and new construction works (-20.6% y/y) by type of work.

All the other segments, either by type of project or work, posted positive or small negative annual dynamics.

The volume of work on non-residential buildings increased by 5.8% y/y, and the works on civil engineering works edged down marginally by 0.2% y/y in January.

If the unexpected decline shown by January construction data is in any way linked to the new invoicing procedures, which posed problems to small firms such as those working on small residential projects as opposed to large companies, this might result in a higher volume of construction works registered in the subsequent months.

Separately, the construction activity is seasonally low in January, and the sharp decrease in the month may not indicate longer-term trends or have a significant impact on the overall annual or even quarterly data.

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