The construction materials market, which fell by around 15% last year, to EUR4.4 billion, risks lacking growth resources this summer, in the absence of Romanians who used to come back home and start construction of new homes or home extensions.
There are around 3 million Romanians working abroad, according to a survey conducted by the Soros Foundation in partnership with the International Agency for Source Country Information, an NGO founded in Austria.
“Unfortunately very few came home, and their number is not expected to rise in August, either, from what I have learned from their families,” says Ionel Gheorghe Dragu, mayor of the Maldaresti commune in Valcea county. “Whereas last year around 80-85% of the locals working abroad used to spend their vacations at home, now less that 10% do. They all say things have gone very badly since last year and they cannot even afford to come home, much less to invest in their homes,” he adds.
In the first half of the year, the Maldarasesti local authorities 15 construction permits, four for people working abroad. “One is for new constructions and three are for extensions, but they are less than half as many as in previous years,” Dragu adds.
The same is true in Moldavia, as Romanians who left to countries such as Italy or Spain choose not to return home for their vacation and much less to renovate their homes or build new ones. Corneliu Ungureanu, mayor of Leorda in Botosani county, says he has issued three construction permits for individuals since the beginning of the year, with three other being processed.
Construction material producers say not even those who come back
home on vacation think of directing their savings towards
constructions. “If Romanians come back home with money, they invest
it in sectors other than constructions, as was the case in previous
years,” says Adrian State, general manager of Den Braven Romania,
polyurethane foam producer, with EUR39.5 million turnover last
year.
Daniel Guzu, who controls construction materials producer Duraziv,
with EUR13.5 million in turnover in 2010, says this year there are
doubts as to whether Romanians working abroad will come back home
or not.
On the other hand, representatives of construction materials producer Sika, the Romanian subsidiary of Swiss group Sika, with EUR15.4 million in turnover in 2010, say they recorded growth in June against June 2010, by 18% on the wholesale segment, and expect Romanians returning home on vacation to make some contribution to the construction materials market, as was the case in previous years.
“For instance, August last year, which is considered slow in terms of construction supplies sales, exceeded the value of the sales in June and July,” explains Petrisor Grindeanu, distribution business unit manager with Sika.