Romania’s residential construction index exceeds pre-crisis maximum

Romania’s residential construction index exceeds pre-crisis maximum
By bne IntelliNews October 16, 2017

Romania’s seasonally-adjusted residential construction index exceeded the pre-crisis maximum hit in August 2008 by 1.5%, according to statistics office data released on October 13. 

As the other segments of the market were lagging behind, the overall construction index was still 32% lower than nine years ago, hovering with no particular direction since 2010.

The construction works index edged up a mere 0.4% y/y in July-August and contracted by 0.6% y/y in August alone, but this was still a good performance compared to the 12% y/y contraction in Q2. 

Civil engineering works kept lagging in July-August (-21% y/y) after a similar massive 20%-30% y/y contraction seen in Q1-Q2. The segment of non-residential buildings (retail spaces, office buildings) saw a milder yet significant average decline (-10% y/y) in the first two months of Q3 after the negative performance in the first two quarters of the year.

Overall, the market performance in January-August this year remained in the negative area (-4.9% y/y) despite the outstanding activity in the residential segment (+86% y/y). This was mainly due to the subdued activity in the civil engineering segment (-26% y/y) on subdued public financing, but also to the 10% contraction in the non-residential buildings segment.

Construction Works y/y 2013 2014 2015 2016 Q1 17 Q2 17 Jul-17 Aug-17
Total -0.6% -6.8% 10.5% -4.8% 1.0% -12.2% 1.3% -0.6%
Residential bldgs. 5.4% 32.6% -5.8% 12.1% 80.1% 74.5% 95.5% 123.4%
Non-residential bldgs. -7.5% 16.6% 1.1% 1.1% -7.3% -15.6% -2.5% -8.1%
Civil engineering 1.4% -21.8% 20.0% -11.2% -20.7% -31.0% -18.4% -23.8%
Source: INS