Romania’s construction work volume increased by 18.3% y/y in the second quarter of the year (Q2) with the segment of work on new projects (+21.7% y/y) outperforming the average – which indicates more confidence among developers, according to data published by the statistics office INS. The construction activity accelerated from +7.7% y/y in Q1, when the segment of new projects (+9.1% y/y) also outperformed the capital repairs and current repairs.

The residential buildings segment (+25.9% y/y) was the most dynamic one in Q2, while those of non-residential buildings (+15.6% y/y) and civil engineering (+16.9% y/y) advanced at double-digit rates as well.

On a seasonally-adjusted basis, the volume of construction work in Q2 leapt up by 11.6% q/q, driven by the new constructions segment (+13.9% y/y).

For the first half of the year, the construction work volume rose by 13.9% y/y, and the segment remains one of the key economic drivers, in the context of a 0.8% y/y (or 1.6% y/y depending on methodology) contraction of the GDP for the period. Romania’s GDP contracted by 0.4% y/y (or 2.0% y/y, depending on methodology) in Q2, after negative annual performance in the first quarter of the year.

In a broader perspective, the construction work volume in Romania reached new records in Q2, driven by outstanding volumes in the civil engineering segment where the financing under the EU-funded RRF and cohesion schemes is visible. The residential buildings segment has been in recovery mode for the past two and a half years after a decline promoted by higher interest rates and bleaker consumer confidence during 2023 and the first half of 2024. 

The strong recovery in the first half of this year, besides the above-average performance of non-food sales, indicates better sentiment among affluent households amid visible budget constraints and bleaker sentiment among households on average. 

On the other hand, activity in the residential buildings segment remains at the levels of the years 2021-2023 (7.9% above the 2021 average), while the non-residential segment (+34.4% above the 2021 average) and civil engineering segment (+78.8% above the 2021 average) have advanced more robustly. 

iulian@romania-insider.com

(Photo source: Somporn Suebhait/Dreamstime.com)