The volume of construction works in Romania increased by 6.1% y/y in February and by 16.7% y/y in January-February, according to data published by the statistics office INS.
The high growth rates, particularly in January (+33.3% y/y), come amid seasonally subdued (thus more volatile) construction works activity in the first quarter of the year and unusually low activity reported in the residential sector during Q1 of 2024 (possibly caused by changes in the invoicing procedures last year).
From a broader perspective, the government expects the sector of construction to contribute significantly to the economic growth in the coming years driven by large infrastructure projects: its output and gross value added should rise each by some 5% in 2025 and nearly 7% in 2026, under the macroeconomic forecast inked last December.
In 2024, however, the construction work volume contracted by 5.9%, and the gross value added generated by the sector contracted by 2.6% y/y. Fiscal consolidation restrictions and slower-than-planned execution of the construction works envisaged under the Resilience Facility may result in a similarly slower advance of the construction works volume this year.
The 23.9% y/y rise in the civil engineering works volume for the two months January-February 2025 (+10.7% y/y in February) may be the effect of the government deferring the payment of public contracts with the aim of keeping the 2024 budget deficit within reasonable limits.
The residential construction works segment recorded a 0.7% y/y smaller volume in February 2025, which is in line with the medium-term downward pattern visible over the past two years. The two-year decline, 31% as of February 2025 compared to February 2023, has reversed part of the 57% advance achieved over the previous four years of constant advance.
The non-residential buildings segment posted a 3.4% y/y advance in February but a modest 0.7% y/y increase in January-February, after volatile dynamics over the past several years: 8.0% y/y decline in 2024, reversing part of the 26% y/y advance, achieved during previous two years.
iulian@romania-insider.com
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