The construction works volume index contracted in Romania by 4.0% y/y in July-August, setting the grounds for a negative performance in Q3 that would reverse the fragile (+0.2% y/y) advance in Q2.

For the entire January-August period, the construction volume index contracted by 3.1% y/y, according to data published by the statistics office INS. 

This comes as a correction after double-digit growth rates in 2022-2023.

Compared to the benchmark year 2021, the monthly average construction works volume in 2024 (seasonally adjusted) was 21% larger despite the 17.3% contraction in the residential buildings segment. The volume of work in the non-residential and civil engineering segments was 23% and 46% larger compared to the 2021 average.

The residential market segment keeps losing ground in the first two months of Q3 2024 (-27.5% y/y in July-August) and is dragging down the entire sector. For the ytd period, the annual contraction was 23.9% y/y. However, its weight in total construction works is two to three times lower compared to that of civil engineering works.

The volume of civil engineering works increased by 4.1% y/y in July-August. It is a weaker performance compared to previous quarters – but such high growth rates (20%-30% y/y starting with Q3 2022) can not be sustained indefinitely. The Resilience Money and the EU budget must have contributed.

The non-residential segment (-2.2% y/y in July-August) has been in a negative growth rate since May as well. 

iulian@romania-insider.com

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