Central Eastern Europe Construction Market Report 4Q 2023
Romania
Local economic indicators
Romania’s gross domestic product (GDP) in 2Q 2023 showed positive growth of 2.6% (seasonally adjusted; constant prices) in a year-over-year (YoY) comparison, attributed to all GDP contributors having positive quarterly results as reported by the local statistical office.
Construction grew by 5.4% in volume (unadjusted data) with respect to 2Q 2022, showing the country’s resilience in the industry.
The Organisation for Economic Co-operation and Development (OECD) maintains its original forecast for the year at 2.6% and 3.2% in 2024.
The most recent data available on the National Institute of Statistics website shows inflation at 8.83% in September, a continuing decline since February’s peak at 15.5%. The Eurostat Harmonised Index of Consumer Prices (HICP) was reported at 9.2% in September.
Construction materials
With data available until September 2023, the local industrial producer price index shows some declining prices in key materials over the past twelve months: bricks, hollow steel shapes, structural metals. Electrical distribution and HVAC saw significant increases but have stabilised in the last few months.
The table below, with data from National Institute for Statistics Romania, shows the change in cost indices month-over-month (MoM), YoY and lastly, with respect to the start of the global pandemic:
Market outlook
The construction confidence indicator had showed improvements between May and July but has once again turned negative in October, reaching -7.8 due to declining work expectations (-6.1) in the short-term and current order books (-9.6). While these results show that contractors may face hardships securing work, materials shortages are reported at a low rate (1.7), and labour shortages remain persistent (16.8).
As always, Gleeds advises regular project budget updates that consider recent market pricing and local risk factors that may impact project programmes and costs. Risk analysis studies are recommended to better evaluate and prepare appropriate contingencies for your particular project conditions and risk exposure.
River House I & II, Bucharest, Romania — Gleeds provided Project Co-ordination, Project Management and Quantity Surveying/Cost Management services.
