The increase of labor electivity costs places Romania on the 8th position in terms of the most attractive manufacturing markets in Europe

Deniza Cristian 21/12/2022 | 10:15

The increase of labor, real estate and energy costs places Romania on the 8th position in terms of the most attractive manufacturing markets in Europe, after countries such as the Czech Republic, Poland, Hungary or Portugal, while also being ranked 22st globally, according to the Manufacturing Risk Index 2022 study, performed by the Cushman & Wakefield real estate consultancy company.

 

Cushman & Wakefield analyzed 45 countries from the EMEA, America and Asia-Pacific regions, using 12 criteria that take into account the market conditions, costs and risks, with Romania being highly competitive in terms of costs and market conditions.

In terms of market conditions, the countries are assessed based on factors that include the business environment, the availability of talent/ labour and the access to markets. The analyzed costs were the ones pertaining to labour, energy and real estate. In order to evaluate risks, the authors specifically looked at the political, economic and business environments.

Thus, in terms of costs, at European level, the Romanian production market is surpassed by the ones in the Czech Republic, Poland, Lithuania, Hungary, Slovakia and Bulgaria, while the world’s most attractive industrial markets are China, United States, Taiwan, India and Canada.

In a ranking that gives a higher importance to market conditions (60% versus 40% in the baseline scenario), Romania ranks 8th, after Poland, The Czech Republic, Hungary, Slovakia, Portugal, Bulgaria and Turkey. Also, in the scenario where the risk share is up to 60% (compared to 20% in the baseline scenario), Romania ranks 17th in Europe.

Andrei Brînzea, Partner, Industrial | Logistics & Land Agency Cushman & Wakefield Echinox:

“Although 2022 has been a challenging year, with inflation, rising energy prices, a potential economic crisis and a conflict in the region, we are witnessing an increased interest from foreign investors towards manufacturing. The pressures on the supply chain and also the relocation of production units from Ukraine and Russia have generated interesting projects in our region. Even though we compete with Poland, Slovakia, Hungary, Serbia, and Bulgaria, we are pleasantly surprised to notice that Romania is still an attractive market for these potential investors, based on our active discussions. We are optimistic that in 2023 we will see more and more projects of this kind and we also believe that it will be an exciting year despite the challenges that lie ahead.”

The Cushman & Wakefield consultants argue that the increase of energy and labor costs had a significant influence on the operating ones in the Central and South-Eastern Europe, especially in Lithuania, Romania, Bulgaria and the Czech Republic, unlike Poland where the effects were more limited.

”Energy costs will remain a key issue for European markets which are more exposed to higher price levels and heightened volatility due to the challenges around securing fuels, particularly natural gas, as a result of the war in Ukraine and the resulting limitations to supply. However, there may well be opportunities for longer term energy security as many countries seek to move their energy reliance away from fossil fuels and towards reliable and sustainable energy sources including renewable, nuclear and alternative fuels”, the report says.

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Deniza Cristian | 19/12/2022 | 18:45

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