Romania’s construction sector heads towards second year of stagnation

The construction works volume index in Romania contracted by 9.5% YoY in April, and it dropped by 3.4% compared to March (in seasonally adjusted terms), the statistics office INS announced.

The situation is not as dramatic as these figures may suggest, but the construction activity in Romania heads towards a second year of stagnation after it edged down by 0.6% in 2021.

This shouldn’t be the case, given the ambitious projects outlined under the Relaunch and Resilience Facility, but the rising cost of the construction materials and the inelastic supply of workforce are significant deterrents to the sector’s growth.

In April, the seasonally-adjusted construction index has declined for the second month in a row, reversing a large part of the gain accumulated over the previous four months, which results in a profile of rater steady activity that would require supplementary resources for the activity to increase sustainably above the levels seen over the past couple of years.

The sector of non-residential buildings (-2.3% YoY in April) marked a negative monthly dynamics (-5.9% mom) after an impressive 60% advance over the previous half a year, in seasonally adjusted terms. Overall, it remains around the average levels seen in 2020-2021.

The civil engineering works (-14.2% YoY in April) lost intensity for the second month in a row and remain vulnerable to the Government’s narrow fiscal space.

Even the residential buildings segment contracted by 10.1% YoY in April - while remaining close to the high levels seen during the previous 12 months. 

(Photo: Bogdan Hoda/ Dreamstime)

iulian@romania-insider.com

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Romania’s construction sector heads towards second year of stagnation

The construction works volume index in Romania contracted by 9.5% YoY in April, and it dropped by 3.4% compared to March (in seasonally adjusted terms), the statistics office INS announced.

The situation is not as dramatic as these figures may suggest, but the construction activity in Romania heads towards a second year of stagnation after it edged down by 0.6% in 2021.

This shouldn’t be the case, given the ambitious projects outlined under the Relaunch and Resilience Facility, but the rising cost of the construction materials and the inelastic supply of workforce are significant deterrents to the sector’s growth.

In April, the seasonally-adjusted construction index has declined for the second month in a row, reversing a large part of the gain accumulated over the previous four months, which results in a profile of rater steady activity that would require supplementary resources for the activity to increase sustainably above the levels seen over the past couple of years.

The sector of non-residential buildings (-2.3% YoY in April) marked a negative monthly dynamics (-5.9% mom) after an impressive 60% advance over the previous half a year, in seasonally adjusted terms. Overall, it remains around the average levels seen in 2020-2021.

The civil engineering works (-14.2% YoY in April) lost intensity for the second month in a row and remain vulnerable to the Government’s narrow fiscal space.

Even the residential buildings segment contracted by 10.1% YoY in April - while remaining close to the high levels seen during the previous 12 months. 

(Photo: Bogdan Hoda/ Dreamstime)

iulian@romania-insider.com

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