Central European Construction Market Report 1Q 2023
Romania
Gross domestic product
Romania experienced slowed gross domestic product (GDP) growth during the last half of 2022, underperforming against earlier forecasts but still maintaining positive figures.
The local Consumer Price Index (CPI) was consistently above the European Union (EU) average throughout the year. A small decline in inflation was reported in December but it remains unclear if this is the start of the downward tendency forecast for 2023.
Construction materials
With data available up until November 2022, the local industrial producer price index implies stability in key materials such as wood, concrete, metals and electrical distribution. Others, such as electrical wiring, saw small price recoveries while heating, ventilation and air conditioning (HVAC) increased greatly during 2022.
Data from the National Institute for Statistics Romania shows the change in cost indices throughout the year:
Sector activity
New construction works in 2022, as measured by the local statistical office, have underperformed in comparison to the previous two years (graph on page two). Public sector work remains the most attractive for contractors as civil engineering works increased nearly 30 points in the 12 months leading up to November 2022.
Logistics/retail developers looking for solar panel installation on existing buildings and other net zero-targeted construction have led to an increase in the renewable energy sector. There has also been a shift from private residential to Build to Rent schemes as developers respond to increasing interest rates, deterring potential buyers.
Construction regulations and the permit process continue to require thoughtful management to ease development challenges. A primary source of conflict is the ever-changing design requirements as Romania adopts EU standards. Achieving project approval is another hurdle which can be eased by securing regular meetings with the approval departments of various authorities to minimise delays in obtaining a license.
Market forecast
As current market trends continue to fluctuate, Gleeds recommends revising previously set project budgets to present day figures based on local statistical information, our own internal data and 2023 forecasts.
Gold Plaza, Bucharest, Romania — Gleeds provided EA/CA/Client Representation services.
