BMI View : Although construction growth will slow in 2016 on the back of a weaker than expected first quarter , Romania ' s construction sector growth will nevertheless outpace the European average over the next five years as EU funding inflows seek to alleviate the country ' s significant infrastructure deficit. An improving macro-economic climate and expansionary fiscal policy will buoy residential construction, a sector we expect to outperform in 2016 and over the first half of our ten - year forecast. Romania's growth potential is clouded by significant risks, however, as the country's c onstruction sector remains plagued by corruption and a lack o f transparency, factors which have caused numerous project delays and cancellations.
Latest Updates A nd Structural Trends
We revised our 2016 construction sector growth forecast downwards to 6.8% on the back of weaker than anticipated Q116 data. The transport sector will be hardest hit and we have downgraded our growth outlook for the sector to 4.2% from 9.2%. We expect a slight uptick in transport sector growth in 2017 as EU funding inflows resume and have accordingly revised our growth forecast upward to 6.5%
Positive housing data indicating a steady growth in issued building permits as well as a brightening macroeconomic outlook for Romania underpins our expectation residential construction will emerge as the outperformer in 2016, with growth projected at 9.5% this year and annualised average growth over the next five years anticipated to be 4.8%.
The ongoing anti-corruption drive continues to gather pace in Romania, with the technocratic government of Dacian Ciolos prosecuting more than 1,250 individuals last year. While the initiative has the potential to improve Romania's business environment over the long term, in the short term we have seen it have a negative effect on infrastructure growth, as public officials remain wary of possible corruption charges and are therefore less likely to move ahead with tendering opportunities and financing decisions.
|e/f = BMI estimate/forecast. Source: National Institute of Statistics, BMI|
|Construction industry value, RONbn||52.80||56.10||60.00||63.80||67.90||72.90||77.60||82.30||87.10||92.30||97.70|
|Construction Industry Value, Real Growth, % y-o-y||8.30||6.80||5.40||3.20||2.40||2.90||2.00||1.40||1.40||1.40||1.40|
|Construction Industry Value, % of GDP||7.4||7.7||8.0||8.0||8.0||8.0||7.9||7.8||7.7||7.6||7.5|
Romania maintains a middling score on the Infrastructure RRI for Q416 with 55.7. This is a 1.3 point improvement over its Q316 score and vaults Romania above the regional average of 55.3.
Romania's improved Industry Rewards score of 55.0, a 2.5 point increase over its Q316 score, is driven primarily by an ongoing influx of EU funding, an expansionary fiscal policy and a steady expansion in construction sector value.
Romania's Q416 Industry Risk score has held fast at 40, as the tendering process remains opaque and a number of local firms have entered bankruptcy proceedings.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Romania Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Romania Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Romanian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Romania to test other views - a key input for successful budgetary and planning in the Romanian infrastructure market.
- Target business opportunities and risks in the Romanian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Romania.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.