The construction works volume contracted by 2.1% y/y in August after the unusually strong 40% y/y surge in July that could be attributed rather to accounting or other bureaucratic developments caused by the budgetary measures implemented by the government, according to data published by the statistics office INS.
The seasonally-adjusted works volume index dropped by 26.2% m/m, reversing the +26.2% surge in July and returning to the usual level seen over the past two and a half years.
By the type of works, the capital repairs (+27.7% y/y) remained particularly high in line with the +51.5% y/y advance seen in H1. New construction volume marked a 2.1% y/y contraction (+6.1% y/y in H1) while current repairs (maintenance) activity (-13.4% y/y after -8.2% y/y in H1) lagged behind the volumes seen in the past years.
By type of project, the +12.7% y/y advance in the residential segment came on the low-base effects, keeping the activity at the same levels seen in 2024, inferior to the previous three years. The non-residential buildings volume (+2.6% y/y) was also broadly in line with the past years’ average, while the civil engineering works (-7.9% y/y) marked a negative performance amid opposite forces exerted by public investments streamlining (fiscal consolidation) and the inflow of funds from the EU budget for infrastructure projects.
The outlook for the sector remains positive, pinpointed by the inflows of funds under the Resilience Facility over the next year and a half, but negative drivers such as the fiscal consolidation (re-distribution of public funding for investments) and plummeting consumer and (to some extent) investor confidence may generate negative developments in some sub-segments across the entire market.
Residential projects, some non-residential sub-segments, and public projects with no immediate relevance may be deferred until the overall economic outlook improves.
However, overall, the state forecasting body CNP expects growth rates of over 3% per year for 2025 and the following years for the construction sector of constructions in terms of value added generated, after the -2.6% y/y correction in 2024 that followed an accelerated advance in the previous two years.
iulian@romania-insider.com
(Photo source: Yury Sevryuk/Dreasmtime.com)
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