Romania Construction Materials Report - Q1, 2014

May 4, 2014

This report covers market developments for Romanian construction materials in Q4 and full year 2013, as well as the data available as of April 2014.

The building materials market paralleled the poor performance of the construction sector in Q4 and full-year 2013. The construction works contracted by 1.5% year on year in Q4 and by 0.6% year on year in 2013. Despite the slight annual decline recorded in 2013, activity in the sector seems to have stabilised at low level. The long-expected large investments in infrastructure projects have not started yet, while thermal rehabilitation works advance at sluggish pace. Accordingly, the construction sector mostly relies on public utilities projects, financed by local administrations, and private residential and non-residential investments.

The cement market continued downwards in 2013 and prospects for 2014 are rather pessimistic, considering that few large infrastructure projects were launched last year. Even though some 108km of highways were inaugurated in Romania in 2013, which is a better performance than in the previous years, there was little impact upon the activity of the cement producers, as most works were in the final stage, when the cement consumption is low.

The masonry market inched up by 1% year on year in 2013, partially on low base comparison and also explained by rising prices. The activity in the construction of buildings remains low, as the number of finished dwellings dropped by 33.5% year on year in Q4 and by 12.7% year on year in full year 2013. On the upside, there are grounds for some recovery in the segment, considering that the number of residential building permits increased on an annual basis for the third quarter in a row in Q1/2014.

Key points:

• Construction materials market value might drop below EUR 3bn in 2014 - producers’ association
• Cement market shrinks year on year in volume, value terms in 2013
• Masonry market inches up 1% year on year in 2013-estimates
• Lafarge, Holcim might need to sell 43% of capacities in Romania amid merger
• Turkish investor buys Praktiker’s 27-store chain in Romania

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