immoflash

Boost in Romanian civil engineering

Prior political factors influenced negative growth rates

Autor: Christy Gilmour Okroj Drummond

The downward trend in growth construction activity in Romania during 2012-2013, with only a slight recovery in 2014, has changed course from 2015 onwards. In contrast to the 1.0 percent recovery recorded in 2014, the construction activity in the country was estimated to have increased by 10.4 percent year on year. This remarkable growth was due to the civil engineering subgroup, which expanded year on year by 20 percent .

Civil engineering has been affected in the past by a 5.8 percent fall in residential output. However, new construction output expanded by 5.2 percent last year. The low performance in the construction industry over the past years is believed to be due to political factors. Its is thought that the government reduced capital investments in order to raise financial resources to increase benefits to the population and in this way gain popularity before the presidential elections in November 2014, which were won by the opposition.

The low degree of EU funds absorption over the past years hampered effective performance in civil engineering activity. Romania is now focusing on improving its absorption capacity for developing funding, and during the 2014-2020 programming period intends to have 19 percent more EU funds than in the 2007-2013 period. The improvement in the absorption rate and a notable increase in public funding and has supported civil engineering projects greatly.

Further information can be found in market intelligence company PMR´s report "Construction sector in Romania 2016."

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