Romania's Construction Sector

Business Wire

July 4, 2011 Monday

RESEARCH AND MARKETS ROMANIA INFRASTRUCTURE REPORT Q3 2011 - THE SECTOR IS EXPECTED TO RETURN TO GROWTH IN 2012 WITHTHE INDUSTRY VALUE RISING TO US$24.3BN BY 2015

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Research and Markets(http://www.researchandmarkets.com/research/0e350d/romania_infrastruc) has announced the addition of the "Romania Infrastructure Report Q3 2011" report to their offering.

Romania's construction sector continues to contract in 2011. Industry value is forecast to stand at just US$16.3bn this year representing negative real year-on-year (y-o-y) growth of -2.6%. This compares with a peak value of US$21bn in 2008. The sector is expected to return to growth in 2012 with the industry value rising to US$24.3bn by 2015 when y-o-y growth will stand at 10%. Key themes to highlight in Romania's infrastructure sector this quarter include: According to BMI revised Power industry forecasts, Romania's power generation and consumption are both expected to rise at a moderate pace in the coming years, recovering from a dip during the financial crisis. BMI now forecasts that Romanian real GDP growth will average 4% a year between 2011 and 2015, while we expect the country's total population to fall from 21.4mn to 21mn over the same period. Between 2011 and 2015, GDP per capita and electricity consumption per capita will both rise, by 45% and 7.6% respectively. Romania has struggled to mobilize desperately needed investment into its road sector despite a number of contract awards over recent years. The delays and cancellations of highway projects illustrate a disconnection between the transport ministry and contractors, as a blame game between the two parties escalates. Six regional hospitals (worth EUR1.5bn) to be built in Romania under a public private partnership (PPP) should provide a shot-in-the-arm both for the country's aging hospital infrastructure and its construction industry following a two-year recession. BMI notes that the projects - financed and managed by the private sector - are an attractive option for Romania's austerity-minded government and the interest generated will be a useful gauge of investor sentiment within the sector.

The author forecasts that the Romanian economy to emerge from its two-year recession in 2011 and make a steady return to growth. The spectacular performance of Romanian exports over recent months, and the concurrent surge in domestic industrial activity, will be central to this recovery - helping to offset ongoing austerity measures implemented by the government. In 2011 the author forecasts growth will be 2.1%, and expects the economy to expand by an accelerated 3.7% in 2012.