Construction firms in Romania have higher debts

Construction firms in Romania recorded the highest level of indebtedness last year since 2008, according to a study published yesterday by the credit insurance firm Coface. The indebtedness level grew from 73% in 2008 to 86% in 2013 and 88% in 2016. Additional funding is not directed to investments, but to covering temporary short-term needs. These companies had bigger problems in recovering their debts last year compared to the previous years. The construction sector evolution in 2017 is strongly affected by the lack of infrastructure projects, according to the Coface study. Long-term investments have also gone down, as the share of fixed assets in total assets fell from 65% in 2008 to 55% in 2012 and 49% in 2016. The construction sector will also have a mixed evolution this year, said the Coface Romania Country Manager Eugen Anicescu. Despite the increase recorded by the residential construction sector as a whole, the lack of infrastructure projects negatively influences the evolution. editor@romania-insider.com