Central Europe Construction Market Report 2Q 2023
Romania
Local economic indicators
Real gross domestic product (GDP) growth remained positive at 4.8% in 2022. The International Monetary Fund (IMF) forecasts GDP to reach a minimum of 2.4% this year, before experiencing a slight recovery in 2024.
The Harmonised Index of Consumer Prices, as calculated by Eurostat at 12.2% for March, tends to run lower than the locally reported inflation figure (14.53%) published at the end of 3Q by the National Institute for Statistics Romania. Inflation appears to be steadily declining, having recovered 1.84% since December, when it stood at 16.37%. The IMF forecasts an annual rate of 10.5%, leaving expectations for continued improvement.
Construction materials
With data available up until March 2023, the local industrial producer price index implies stability in key materials including wood, metals and electrical distribution. Others, such as glass, clay building materials and steam and air conditioning (HVAC) saw cost increases during 1Q 2023.
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 February, from December of the previous year:
Contracts
Data from the National Institute for Statistics Romania shows an increase in new construction contracts during 1Q 2023 compared to the same period during the previous three years (2020–2022), resulting as an additional data point, indicating that the local industry has not been overly affected by global challenges.
Market forecast
The construction confidence indicator is steadily improving, now at -6.7, recovered from -14.1 in January 2023. Employment expectations returned to positive figures in March (4.4) and April (5.3) after experiencing negative figures since August 2022. In general, expectations of increasing prices remain the biggest factor limiting building activity as reported by the Eurostat construction survey.
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.
River House I & II, Bucharest, Romania — Gleeds provided Project Co-ordination, Project Management and Quantity Surveying/Cost Management services.
