Central Europe Construction Market Report 3Q 2023
Romania
Local economic indicators
The Organisation for Economic Co-operation and Development (OECD) reports that Romania achieved 0.1% gross domestic product (GDP) growth in 1Q 2023. The OECD’s recent Economic Outlook, published in June 2023, forecasts an annual growth rate for the year at 2.6% due to improved household spending as inflation eases. Further recovery is predicted for 2024 and GDP is expected to produce an overall growth rate of 3.2% in the coming year.
The most recent data available on the National Institute of Statistics website shows inflation at 10.3% in June, the fourth consecutive month in 2023 to produce declining rates since February’s peak at 15.5%. The Eurostat Harmonised Index of Consumer Prices (HICP) has better results since its peak in December 2022 at 14.1% and recently reported at 9.3% in June.
Construction materials
With data available up until May 2023, the local industrial producer price index shows some declining prices in key materials since January 2023, including flat glass, bricks and structural metals. Others, such as concrete, steel tubes, electrical distribution and steam and air conditioning (HVAC) saw cost increases during the same period.
Data from the National Institute for Statistics Romania shows the change in cost indices month to month where, generally, all types of works have experienced cost increases in 2023. The below table shows changes up until May, from January of this year:
Market outlook
The construction confidence indicator has continued to improve, at -0.1 in June (nearly neutral), an improvement from -14.1 in January 2023. Employment expectations have also improved throughout the year from -6.7 in January to 11.2 in June. Material and equipment shortages are now a minimal problem for most survey respondents (at 1.8 points in June). Although price increases have been a continual concern, the June survey shows a decrease of 7.7 points.
As always, Gleeds advises regular project budget updates that take into account recent market pricing and local risk factors which 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.
