Romania’s construction sector prepares for weakest post-crisis year

Romania’s construction sector prepares for weakest post-crisis year
By Iulian Ernst in Bucharest December 15, 2017

Romania’s construction works index decreased by 7.5% y/y in January-October and a similar full-year performance would lead to the weakest post-crisis year in 2017. The construction works index contracted by 13.4% y/y in October, the statistics office reported on December 14.

Romania’s construction sector failed to gain momentum after the 2009-2010 plunge and it has hovered close to the level reached in 2007 (before the 2008 peak followed by the recession). A further decline in 2017, which might be the steepest since the first recession years 2009-2010, would bring activity in the sector to a significant 12% below the level seen in 2007.

However, the dynamics across the sector’s segments are quite uneven. The residential buildings’ segment is doing quite well: the volume of works there expanded by 36% y/y, in the rolling 12 months ending October 2017, versus the 2007 benchmark. In contrast, the volume of civil engineering works contracted by 28% in the 12-month period, versus 2007. The non-residential buildings segment posted a moderate 7.1% y/y advance.

The dynamics of the segments in the first ten months of 2017 broadly resemble the comparison with 2007. Namely, the volume of residential buildings works soared by 75% y/y, while the volume of civil engineering works plunged by 25% y/y. The non-residential buildings segment contracted by 14% y/y.

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