Romanian construction companies’ gross output, in comparable prices, surged by nearly 22% y/y in the last quarter of 2022, according to data released by the statistics office INS.

The increase in building companies’ activity accelerated from 16% y/y in Q3 and contributed to the year’s overall 13% y/y performance. 

The increasingly restrictive lending terms (rising interest rates) put a cap on the buoyant residential market segment in the last three quarters of 2022 but the monetary tightening had no visible effects on the segments of non-residential buildings and civil engineering.

In fact, both these two segments gained momentum, particularly in the second half of the year when they advanced by 26% y/y each.

In contrast, the output in the residential segment inched up by a mere 1% y/y in H2.

The hopes for further economic growth are partly linked to this sector, where the projects are supposed to flourish thanks to the Resilience Facility money and other funds from the European Union’s budget.

The workforce is turning into a significant constraint but the capacity of the companies to undertake multiple projects may also prevent the development of the projects at full speed.

Although this is not so visible in first-tier cities, where major projects are still under construction, the residential segment is likely to remain muted for a while at least this year.

This will benefit the logistics, industrial and civil engineering segments that thus can absorb more resources and undertake projects with a higher multiplication factor and stronger impact on further economic growth.