The construction sector highly depends on the public investment program. The plunge comes as the state’s investment expenses also contracted in the first four months of this year, by almost 40%, to 5.9 billion lei, the equivalent of just 0.9% of GDP, according to Finance Ministry data.
“Constructions will rebound only amid stable economic growth,” believes economic analyst Dragos Cabat, managing partner at consultancy Financial View.
On the other hand, non-residential and residential building constructions rose by 15.1% and 9.5%, respectively in the first four months against the corresponding period of last year.
Romania’s construction market in 2013 reached EUR9.6 billion, down around 40% from the boom period. Constructions contributed 7.9% to GDP last year, while they weighed 11% in 2008 and contributed one third to the economic growth of that time, which topped 7%, according to ZF calculations.
Moreover, despite Romania’s posting 3.5% economic growth last year, constructions had no contribution to the GDP advance.
In 2013, construction work volumes shrank by 1.6% on the year.
(English version by Catalina Apostoiu)