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The construction works volume dropped by x.x% y/y in April, after having declined by x.x% y/y in Q1. Civil engineering works, expected to propel the whole sector this year, performed particularly weak in April, when they shrank by xx.x% y/y after the 9.7% y/y drop in Q1. Construction of buildings, on the other hand, inched up by x.x% y/y in Jan-Apr 2013. The prospects for this year are rather uncertain, as the long awaited public investments in large infrastructure projects have been postponed or delayed. Nonetheless, the situation might improve in the second half of the year, as the EU resumed this June the intermediary payments for projects in Romania under the transport sectoral operational programme. The programme was pre-suspended in December 2012, after intermediary payments were halted earlier in the year.
The real estate market maintained stable at low levels in Q1/2013. The residential market remains overall frozen, but prices decline continued to ease over the quarter. The retail and office markets were more dynamic. The new office space deliveries in Q1/2013 nearly equalled the entire supply added to the market in full year 2012. Modern retail space deliveries were abundant in H1/2013, but just as in 2012, consisted mainly of shopping galleries and extensions, for which financing is easier to secure and completion timeframe is shorter. We also note that an increasing number of retailers and developers have started to use their own resources to finance new developments. Only one shopping mall project was delivered in H1/2013, namely Uvertura Mall in Botosani (North-East), in March.
There is still enough room for growth on the retail segment and the market pipeline looks encouraging in this regard. Some eight shopping mall projects are scheduled for delivery by 2015 and many others have been announced without specific completion timeframe, yet it is difficult to predict how many of them will actually be finished.
Romania still has good growth prospects in the medium and long run also in the road construction segment (xx% of the roads are not asphalt paved) as well as in construction and rehabilitation of residential buildings (roughly xx% of the dwelling stock is older than 20 years). In 2013, the sector’s development however relies on the unblocking of major projects and public investments in infrastructure.
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