Europe Biannual Construction Market Report 1Q/2Q 2025
Romania
Top opportunities
Data centres: Increasing investment in modern and energy-efficient data centres to support growing digital infrastructure demands.
Defence: Heightened focus on defence projects, including infrastructure upgrades and modernisation, driven by regional security priorities.
Energy: Significant opportunities in renewable energy, particularly wind and solar, as Romania aligns with EU sustainability targets.
Healthcare: Modernisation of hospitals and healthcare facilities, with an emphasis on expanding capacity and improving medical infrastructure.
Top trends
Digital tools and AI: The use of digital tools, data, and artificial intelligence is increasingly shaping business practices and operations in the region.
Sustainable construction/Net Zero: Romania is increasingly focusing on sustainable construction practices, prioritising energy efficiency, renewable materials, and reducing carbon footprints to align with EU climate goals.
Local economic indicators
Year-over-year (YoY) gross domestic product (GDP) growth in Romania, as reported by The European Commission, slowed from 2.4% in 2023 to 1.4% in 2024. This reduction was due to declines in industrial production, residential construction, IT, and transport services, driven by reduced demand from key trading partners, rapid wage growth, and high energy costs. However, GDP growth is projected to rebound to 2.5% in 2025 and to 2.9% in 2026, driven by improvements in exports, private consumption, and private investment, supported by EU Resilience and Recovery funds (RRF). When viewing GDP compared to the previous period, QoQ, Eurostat reports that Romania experienced stagnation with no increase seen between 2Q and 3Q 2024. Eurostat also reports that in 2024, the construction industry’s gross value added, which measures its contribution to Romania’s overall GDP, did fall slightly from its level of 8.3 in 2Q to 7.9 in 3Q. Eurostat's Harmonised Index of Consumer Prices (HICP) fell significantly from an average of 10% in 2023 to 5.5% in 2024, a nearly 50% decrease, though inflation remains elevated due to rising wages and high service prices. Inflation is forecast to continue its downward trend to 3.9% in 2025 and 3.6% in 2026, eventually aligning with the EU target range of 1.5% to 3.5% by late 2026. Nominal wages grew by over 10% across public and private sectors in 2024 but are expected to moderate in 2025 and 2026 as inflation stabilises. Unemployment is forecast to remain stable at 5.5% in 2024 and 2025, with a slight improvement to 5.4% in 2026.
Construction materials
The local industrial producer price index, with data available until October, shows month-over-month (MoM) price stability across most sectors, with a significant decrease of 4.6% in steam and air conditioning supply. When viewing the YoY figures we also see a notable recovery in the price of steam and air conditioning supply, at 10.7%, as well as in bricks and tiles, 5.8%. When indexing for June 2022, when oil prices peaked due to the Russia-Ukraine conflict, significant price recoveries can be seen in bricks and tiles, 15.8%, tubes and pipes, 15.1%, and steam and air conditioning supply, 20.6%. There was however a noticeable increase in the price of electrical distribution over the same period of 23%. The table below, with data from the Insse shows the change in cost indices MoM, YoY and indexed:
Market outlook
Romania’s construction confidence indicator, CCI, has been on a consistent decline in the second half of 2024, gradually falling from -2 in July to -13.2 in December 2024. This downward trend was driven by falling figures in both order books and employment expectations, which decreased from -11.2 and -8.3 in November to -16.9 and -9.5 in December. However, it is important to recognise that a decrease in the CCI in countries with colder climates during the winter months is also part of a cyclical trend influenced by adverse weather conditions, with slow order books and reduced work expectations.
The largest challenge currently facing the Romanian construction sector is price expectations for the next three months, which have remained persistently high over 3Q and 4Q 2024, with the most recent figure for December standing at 24.1. Aside from price expectations, all other factors limiting building activity remain reportedly low, with a shortage of labour being the highest reported figure for both the 3Q and 4Q averages, as well as December, at 15.9 and 15, respectively.
Local office input
The construction sector continues to face challenges, particularly in private development, where high financing costs and subdued demand across office, retail, logistics, and residential markets have slowed investment. However, towards the end of 2024, there have been encouraging signs of market movement, with increased activity in mergers, acquisitions, and buyouts.
Meanwhile, the public sector remains a key driver of construction, with infrastructure projects, especially highways, leading the way. Many contractors are shifting their focus to public sector opportunities, although tight margins and cash flow constraints remain a concern.
Looking ahead, rising material and labour costs, ongoing workforce shortages, and elevated energy prices are expected to create further pressures for the industry. Navigating these challenges will require adaptability and strategic planning to ensure continued resilience in the sector.
Gleeds recommends revising previously set project budgets to present-day figures based on local statistical information and our own internal data. Additionally, we advise investors to consider inflation contingencies in their budgets as materials and labour shortages remain unpredictable.
River House I & II, Romania — Gleeds provided Project Co-ordination, Project Management and Quantity Surveying/Cost Management services.
