The local construction market reached EUR 10 billion in value last year; double the figure in 2002, according to an InterBiz group report. The real value of the market could be even bigger, if the black market and the buildings developed by individuals were included. Overall, the market was worth some EUR 12 billion. The value of the construction sector increased by 33 percent in 2005. Construction materials cover almost half of the total construction market in Romania, according to data from the research company.
Mineral construction material consumption increases by 23 percent
The construction materials market reached EUR 5.7 billion in value last year, of which more than half is covered by mineral construction materials, Adrian Iordache, business manager at InterBiz group, told Business Review. The group of mineral construction materials made of cement, masonry, wet concrete, mortar, ceramic plates, adhesives, concrete prefabricates, aggregates and glass accounted for more than half of this market – EUR 3.2 billion of the total local consumption of construction materials. The sum in 2006 increased by 23 percent on the previous year, says Iordache. In 2010, the local consumption of mineral construction materials will be EUR 5.3 percent. The consumption of such materials will increase by 15 percent each year in the next three years, said Iordache.
The study carried out by InterBiz found the local production of mineral construction materials reached some EUR 2.5 billion last year. Cement accounted for 20 percent of the local production last year, reaching some EUR 470 million.
The difference between local consumption and production was covered by imported mineral construction materials. The weight of imports increased from 22.5 percent in 2001 to 30.2 percent last year. The InterBiz Group experts expect imports on this segment to slightly decrease to 28.5 percent by 2010.
The production of such mineral construction materials is expected to reach EUR 4.2 billion in value by 2010.
The other two segments of the local construction materials market are covered by chemical materials with EUR 1 billion in consumption, and metallic materials worth some EUR 1.6 billion. Mineral construction materials make 33.7 percent of the total cost of construction works, said Iordache. They will be worth 38 percent of the cost of a development in 2010, found the InterBiz Group report.
Consumption to increase by 15 per year
The local production of construction material is set to double, mostly on the mineral construction materials segment. Consumption is expected to increase by 15 percent each year, which is below the increasing pace between 2001 and 2006, said Iordache. The value of imports will slightly decrease, while the volume of imports will increase. This means imported construction materials will become cheaper, due to a strengthened local currency and lack of custom taxes, said Iordache.
Ex works prices for mineral construction materials will rise by 6 percent this year and another 3 percent in 2008, he estimates. Prices are expected to stabilize from 2009. Until then, utilities will be the major influence on prices. This is why most of the construction material producers will have to invest in modernizing and replacing equipment that consumes large amounts of natural gas or electricity.