Improving prospects for Romania
2012-04-09By Gabriel Petrescu for the Southeast European Times
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Email this to a friendBattered by the economic crisis for the past two years, prospects for
Romania's construction sector are starting to improve. And that is good news for
the overall economy, as the sector contributes about 15% of the GDP.
Fueling optimism is the government's commitment to infrastructure projects
and the expected large public investments in the sector.
Mihaela Tudorache, a sales representative AE(and)T Trading International,
which provides electrical installations and components for construction,
believes that "in the rest of this year and especially next year, we expect that
there will be a revival of civil engineering, and we focus on bringing more
interesting offers for this type of construction."
There has also been an uptick in the construction of commercial buildings,
particularly for retail use.
Smaller contractors often depend on jobs subcontracted to them by larger
firms. And those have not been plentiful. "It was a long winter, with much snow
just when spring had come, so that work on major sites began later. Those who
build their houses postpone work until after Easter," explained Dan Vasilescu,
who heads a team of 20 workers with more than ten years of experience.
Complicating the situation, Vasilescu told SETimes is that "contracts with
municipalities for block rehabilitation will start shortly before the election,
which made this spring period almost dead. We hope to recoup losses in the
second part of this year."
Victor Petrescu, general manager of Corola Condesign, agreed. "Things
didn't started well in 2012,” he said, “especially as it is an election year and
there will not be large projects. So the possibilities for subcontracting work
are limited. I hope next year to be better."
These subcontractors -- electricians, plumbers and others -- are survivors
of the severe housing market crash. The number of building permits in 2011
dropped by 6.6% from the previous year.
The number of completed dwellings, as they're known in the construction
industry, declined by even more, 8.9%, according to Intellinews. Residential
prices continued their slide as well.
The new year may mean more business but analysts note there are some of the
same old obstacles. Payments from the state are often in arrears, financing can
be hard to come by and fuel prices remain volatile.
But there is good news in a study by PricewaterhouseCoopers. It suggests
that central and Eastern Europe will be the second most dynamic emerging market
for construction between now and 2016, with an annual growth rate of 7.9%,
second only to East Asia, with 8.3%.
