The index of construction works volume in Romania dropped 8.9% y/y in May, the statistics office reported. The decline comes after an 11.1% contraction in April [revised from minus 9.4% y/y] and has contributed to a combined 9.9% y/y decline in construction activity for Apr-May.
Earlier in Q1, the annual performance was a negative 4.4% y/y.
While no new construction projects are being generated, the construction companies are busy repairing what they have built in the past. This is in line with anecdotal evidences of many large real estate projects being restructured for new purposes. Even more repairs are needed for civil engineering works [roads mainly] where the quality of the work was particularly poor.
The sector’s annual performance was negative for a third quarter in a row and Apr-May data prepared the ground for an even steeper annual decline in Q2.
The seasonally-adjusted index increased by 3.1% m/m in May – but this has not changed the downward pattern significantly. The seasonally-adjusted index has decreased visibly during the last three quarters of 2012 and the pattern has been uncertain during the first months of 2013.
Notably, the works for new constructions declined sharply by 19.6% y/y in May and 20.4% y/y in Apr-May after a major 14.6% y/y contraction in Q1. The weak generation of new projects is also visible in the dynamics of the seasonally-adjusted index for works on new constructions – which has declined for the past 12 months.
On the opposite, the capital repair works increased by 25.2% y/y in May and by 22.1% y/y in Apr-May, after a robust 18.1% y/y advance in Q1.
|Construction works index||2009||2010||2011||2012||Q1-13||Apr-13||May-13|
|Total, swda* q/q, m/m||n.a.||n.a.||n.a.||n.a.||-0.9%||-4.5%||-3.1%|
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