Romanian constructions sector down by 5.7 pct in first seven months of 2017

Romanian constructions sector went down in 2016 by approximately 2 percent to EUR 9.6 billion, while the employees’ number increased approximately by 5 percent, according to a press release of Euler Hermes Romania.

Although the GDP increased by 5.8 percent, the constructions sector registered a decrease by 5.7 percent in the the first seven months of 2017.

The growth from the last years registered a comeback, the indices grew by 2.8 percent in July compared to June and by 1.4 percent compared with 2016. The underperformance refers to the underfinance of the infrastructure sector. The share of infrastructure in constructions sector was higher by 61 percent in 2016, compared with 57 percent in 2016 and 2017 and even more reduced in 2018 to 50 percent.

Cristina Rusuleanu, country manager of Euler Hermes Romania, says: „At macroeconomic level, we are on a growing trend and the companies generally have business growths. However, the deficit expanses in infrastructure begin to affect negatively some sectors. Also, beyond the high consumer demand, we see a growing tendency of the inflation, putting pressure on profit margins, affecting the working capital and liquidities. All these are the signal of an increased payment delays in the next months and will require a higher monitorization level of financial risks for companies.”

In the sub-sectors there are high differences. The engineering infrastructure works decreased by 25.7 percent, the non-residential works dropped by 11.4 percent partially compensated by the residential growth of 81.2 percent in the first seven months.

Read more about

Easter celebration: museums dedicated to eggs decoration

read more

If the previsions for initial public expenses will be fulfilled, the constructions works volume will be at a level similar to the one from 2016.

The constructions represented 5.6 percent of the GDP in 2016 and they are forecasted to drop to 5 percent in 2017.

The private projects, the office and residential sub-sectors determine the growth, while the commercial development of malls slackened in 2017.

The offices demand is driven by IT and outsourcing centers, while the high consume increased also the residential sub-sector.