Construction in Romania

by Sameer Joshi or 01-Jun-2018

Construction activity in Romania was weak throughout 2017, due to low investments in infrastructure projects on the back of political uncertainty and delayed structural reforms. Political instability affected investor confidence, with a lack of consensus among the ruling party, resulting in there being three prime ministers since the government was formed in December 2016. Additionally, ongoing corruption allegations and the government’s inability to implement effective measures to resolve the issue had a negative impact on investor confidence, which reduced the flow of investments in construction projects.

The total construction project pipeline in Romania, as tracked by the Construction Intelligence Center (CIC), including all mega projects with a value above US$25 million, stands at RON374.2 billion (US$92.6 billion). The pipeline is skewed to early-stage projects, which account for 56.5% of the pipeline as of June 2018.

Although the country’s unstable political scene is expected to pose a risk to the business environment, the industry’s expansion over the forecast period will be supported by the government’s efforts to develop the country’s transport system to enable the efficient movement of goods and people, as well as plans to improve social infrastructure. In February 2018, the government announced plans to construct 250km of railways, 350km of highways and several hospitals and schools by 2020.