The volume of construction works in Romania decreased by 5.0% y/y in the first 11 months of 2024, according to data published by the statistics office INS.

The figure compares to a 1.5% decline expected by the government for the entire 2024, included by the state forecasting body CNP in the latest projection drafted in December and envisaging robust growth rates of 5% in 2025 and even higher in the years to come. 

While the funds expected under the Resilience Facility will support activity in the civil engineering and possibly non-residential buildings segment, consumer confidence will most likely keep the residential segment at low growth rates. The government phasing off the tax allowances enjoyed so far by the employees in construction and tighter taxation have had an overall negative impact on the sector.

By construction objects, decreases were recorded in January-November in residential buildings (-23.6% y/y) and non-residential buildings (-7.4% y/y). Engineering constructions increased by 4% y/y, thanks to the advance seen in the large-size projects financed from the budget and the EU.

The decrease was particularly steep in October-November (-12.2% y/y), paving the way for a negative contribution to the economic growth in the last quarter of 2024.

The sector’s decline in 2024 comes as a correction after double-digit growth rates in 2022-2023, when the volume of construction works marked a combined advance of 30% driven by the civil engineering works (+49.3%) and non-residential buildings (+26.1%). The residential segment has also lagged behind the average in 2022-2023 (+3.4%) amid a combination of factors, including increasing interest rates, a scarce workforce, and the high level of activity in the segment already reached after previous years.

iulian@romania-insider.com

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