The construction work volume index increased by 32.6% in the first quarter of the year (Q1) compared to the same period last year, the statistics office INS announced.

The sector alone might have contributed 0.7 pp to the 2.4% year-on-year GDP growth in the quarter.

The annual increase in the construction sector eased marginally in March - but not by much, to 29.6% year-on-year.

The volume of civil engineering construction work, reflecting the Government’s involvement in infrastructure projects, surged by 53.3% in Q1, and its annual growth rate strengthened to 57% in March. The volume of work on residential construction projects increased by 21.8% in Q1, while the non-residential segment went up by 17.6%.

Notably, the construction activity is seasonally lower in the first quarter of the year: 14% of the construction works for the full year, in 2019. Still, constructors have continued their activity in April, while many factories and shopping malls have closed due to the COVID-19 pandemic.

Although the residential segment might be dragged down by lower consumer confidence, other drivers could support further growth of the construction sector in the coming quarters. Firstly, the Government has promised to launch major infrastructure projects (and invest 6% of GDP in such projects over two years). Secondly, the logistic and industrial segments will need extra capacities to accommodate a more substantial role played by Romania as a logistics and manufacturing hub - which is a feasible scenario to be confirmed. 

editor@romania-insider.com

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