Growth and popularity of the construction industry in Romania
– Romania has become a popular choice for British property investors.
– Romania has made the top ten in the Global Emerging Markets Index for the first time.
– House prices in Romania have seen significant increases in recent years.
– The interest rate in Romania has dropped from 154% in 1997 to 8.9% in 2005.
– The construction industry contributed 5.95% to Romania’s GDP in 2006.
Investment and funding in the construction industry
– The construction industry in Romania has received funds from foreign institutions such as the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB).
– The Romanian Ministry of Environment and Water Management is working to align Romanian environment standards with European standards.
– Ongoing construction projects in Romania include the Bucharest-Brasov motorway.
– Foreign companies, such as Siemens, AES Corporation, and Societe Bancaire Private, are showing interest in electrical production capacities in Romania.
– The rising budgetary deficit has adversely impacted the availability of funds for the infrastructure sector.
Infrastructure business environment in Romania
– BMI ranked Romania 12th out of 13 states in Emerging Europe for the infrastructure business environment.
– The construction industry is forecasted to reach a value of RON36.2 billion (US$13.41 billion) by 2011.
– The Romanian construction industry experienced a significant downturn in 2009 and 2010.
– PMR Ltd forecasts stabilization and a return to overall construction market growth in 2012.
– Civil engineering construction in Romania performed better in 2011 compared to residential and non-residential segments.
Capital expenditure on infrastructure projects
– Increased capital expenditure on infrastructure projects, particularly road and railway construction, has contributed to the growth of civil engineering construction in Romania.
– Despite the economic downturn in 2009 and 2010, the value of civil engineering works in Romania has not decreased greatly.
– Civil engineering construction increased by nearly 16% in 2011, reaching RON 35 billion (€8.3 billion).
– Road and railway construction projects have played a significant role in the growth of civil engineering construction.
– The residential and non-residential segments of the construction industry in Romania experienced decreases.
Future outlook for the construction industry in Romania
– Growth in the Romanian construction market is not likely to return before 2012.
– PMR Ltd forecasts a return to overall construction market growth in 2012.
– The value of civil engineering works in Romania is expected to continue to increase.
– Stabilization in the construction market is expected in 2012.
– The construction industry in Romania is expected to experience development and growth in the coming years. Source: https://en.wikipedia.org/wiki/Construction_industry_of_Romania
Construction activity (about 10% of GDP) has increased due to recent[when?] tax incentives. Romania has become an increasingly popular choice for British property investors, according to recent[when?] research from Currencies Direct. The latest[when?] Global Emerging Markets Index from the foreign exchange company shows that Romania has made the top ten for the first time, reaching number nine. The monthly index is based on the number of foreign exchange transfers undertaken by the firm to emerging market regions for property purchases. According to Currencies Direct, Romania has seen significant increases in house prices in recent years[when?] and its interest rate has dropped from a level of 154 per cent in 1997 to 8.9 per cent in 2005.
The construction industry in Romania contributed an estimated 5.95% in 2006 to the country's gross domestic product (GDP). Business Monitor International released Romania Infrastructure Report Q2 2007 in which they forecast an average industry growth rate of 6.84% over the 2007-2011 period.
The construction industry has been receiving funds from foreign institutions including European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB). Furthermore, the Romanian Ministry of Environment and Water Management is making efforts to align the Romanian environment standards with the European standards. One of the ongoing projects in the country is the construction work on the various sections of the Bucharest-Brasov motorway. An increasing number of foreign companies are showing interest in electrical production capacities in the country. Companies include Germany's Siemens, U.S-based AES Corporation and Geneva-based Societe Bancaire Private.
However, the construction industry is subject to a number of risks, which can affect its growth. The rising budgetary deficit, for example, has had an increasingly adverse impact on the availability of funds for the infrastructure sector.
Despite the drawbacks, BMI ranked Romania 12th out of the 13 states included from the Emerging Europe for the infrastructure business environment. The construction industry is forecast to reach a value of RON36.2 billion (US$13.41 billion) by 2011, from an estimated RON20.88 billion (US$7.43 billion) in 2006.
Prior to the start of the crisis, the Romanian construction industry was one of the most vibrant in the European Union, but this changed dramatically in 2009, when construction output fell by 15%, with a similar reduction following in 2010. In 2011 Romanian construction market should finally lead to a measure of stabilisation on the market, but growth is not likely to return before 2012.[needs update] PMR Ltd released "Construction sector in Romania 2011- Development forecasts for 2011–2013" report in which they forecast stabilisation and return to the overall construction market in 2012.
Romanian civil engineering construction has registered considerably better performance in 2011 compared to the residential and non-residential segments, which posted decreases. The reason behind this is increased capital expenditure on infrastructure projects, particularly road and railway construction. Despite the strong economic downturn Romania experienced in 2009 and 2010, the value of civil engineering works has not decreased greatly, compared to the decreases in non-residential and residential construction. According to the latest PMR report, entitled Construction sector in Romania 2012 - Development forecasts for 2012–2014, civil engineering increased by nearly 16% in 2011, reaching RON 35 billion (€8.3 billion).
