NEWS: Major construction projects - almost nonexistent this year

In the first months of last year, many companies involved in projects supported by European funds announced the implementation of a series of meaningful targets. In the same period, the main rating agencies maintained their previous qualifications for the Romanian economy. These two elements were supposed to generate a state of security among foreign investors, but during the last quarter of 2012 the buzzword was again uncertainty, characterizing the entire construction sector. The situation worsened visibly because of social and political tensions which have emerged and this might generate undesirable effects in 2013. Thus, the foreign direct investments may reduce further, especially since, according to the Central Bank (BNR), in 2012 this figure decreased by 11.13% comparison with 2011, down to 1.613 million Euros. As the political and economical environment continues to be unstable, although tensions are less visible in 2012, it is likely that, due to mistrust on the fulfillment of the government stimulus programs addressed, including the construction market, major international agencies will review estimates in the negative way. The main cause is the lack of reasons to allocate funds for carrying out specific projects under optimal conditions, regardless whether the investors are foreign or national, individual or institutional. A partial review of the economic crisis shows that the domestic economy has experienced major fluctuations since the end of 2008, the successive failure fueling the rise of the lack of interest of those who could influence positively the construction market and its related fields. Thus, it is not surprising that during last year, the most dynamic segment remained the civil engineering works, in the detriment of other types of projects, so only firms that address to the infrastructure sector benefited of a recovery trend. Most affected by the decline in the number of contracts and orders (the volume of works and turnover) were market operators that relied exclusively on residential buildings. They reached in 2012 one of the lowest possible levels of activity, in terms of revenues. For further information and a detailed analysis of the current Agenda Constructiilor issue, click here!