Sub-performance is the result of sub-financing of the infrastructure sub-sector, according to a study by Euler Hermes. The weight of infrastructure in the construction sector was above 61% in 2015, compared with 57% in 2016 and 2017, and is seen reaching 50% in 2018.
Overall, the construction sector lost approximately 2% in 2016, reaching the threshold of EUR9.6 billion, and the number of employees grew nearly 5%, the study shows.
Sub-sectors see huge differences. Therefore, the engineering infrastructure works lost 25.7% and the non-residential works fell 11.4%, being partially offset by an 81.2% surge in residential works in the first seven months. Constructions accounted for 5.6% of the gross domestic product in 2016 and are expected to drop to 5% in 2017.
As regards private projects, the office and residential sub-sectors determine the growth, while the commercial development of shopping malls stagnated in 2017. The demand for office space is driven by IT and outsourcing centers, while the increased consumption also fuelled residential sub-sector (12,000 housing units in 2017, in capital city Bucharest alone).
The residential sector continued its development and the biggest increase in prices per square meter over the last 12 months was registered in Bucharest (nearly +13%) and Cluj (+ 12%), from EUR1,240/square meter and EUR1,330/sqm, respectively.
The lack of skilled staff explains the poor performance of producers, merchants of building materials and constructors.
Financial services firm Euler Hermes operates in over 50 countries and has more than 5,800 employees. Euler Hermes is a branch of Allianz, listed on Euronext Paris (ELE.PA). the company registered a consolidated turnover of EUR2.6 billion in 2016.