Romania’s construction activity recovers quickly in April after weak Q1
<p>The volume of construction works in Romania surged by 16.2% y/y in April after unexpectedly contracting by 7.0% y/y in Q1, according to data published by the statistics office INS.</p>

<p>The sector of construction made a negative contribution to Romania’s GDP growth in Q1 after it propped up a modest 1.9% economic advance in 2023.</p>

<p>The large infrastructure projects are expected to keep the sector on an upward trajectory, and April data suggest this scenario, although the residential segment is still suffering after a high interest rate episode and volatile construction materials prices.</p>

<p>The seasonally adjusted construction volume index in Romania plunged by 36.4% m/m in January (-54.3% y/y), but it has gradually recovered: by 18.5% m/m in February, 9.3% m/m in March and 8.0% m/m in April. Eventually, helped by some low base effects, it posted a bright +16.2% annual advance.</p>

<p>For the period January-April, the construction works volume (gross terms) was close to that in the same period last year (down a mere 0.2% y/y). The outstanding performance in April, when seasonally the construction market is gaining momentum, offset the whole decline seen in Q1.</p>

<p>When it comes to the market segments, the recovery in April was driven by the non-residential buildings (+18.5% y/y) and civil engineering works (+21.1%), two sectors that have performed decently in the first quarter of the year as well. The sector of residential buildings recovered after the hiatus in January and in the whole of Q1 (-33.6% y/y) but still posted a modest +3.6% y/y advance in April.&nbsp;</p>

<p>For the whole January-April period, the volume of work on real estate projects still lags by 23.6% behind the volume in the same period last year. For comparison, the other two segments are on the positive side, with annual growth rates of +4.3% y/y (non-residential buildings) and +11.1% y/y (civil engineering works).</p>

<p><em>iulian@romania-insider.com</em></p>

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