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Romania's construction sector soars by 41% y/y in July
By Iulian Ernst in Bucharest September 17, 2019
Romania's construction sector boasted 41% annual growth in July, the statistics office INS announced. Civil engineering works returned to normal levels after two disappointing years (2017-2018) while works on residential projects doubled from the levels seen in the years after the recession (2010-2014).
The outstanding performance in July comes on the top of the 31% growth in gross terms (or 21% y/y in value added, or net terms) recorded in the second quarter of the year when the sector made an outstanding contribution of 0.7pp to the 4.4% GDP growth.
Large infrastructure projects have the potential to support a robust growth rate for the entire construction sector and contribute to the GDP growth, but until now the slow absorption of funds from the European Union budget prevented such a scenario.
The volume of work on both residential and civil engineering projects surged by 45% y/y. The performance in both segments is partly due to the low base. However, while the seasonally adjusted volume of work in civil engineering still lags behind the benchmark 2015 average level, the volume of activity in the residential segment is 85% higher.
In the segment of non-residential buildings, the volume of work rose by 30% y/y and in seasonally adjusted terms was nearly 10% above the benchmark 2015 average level.
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Rise was driven by electronics and automotive sectors where foreign investors have developed production facilities, while light industry keeps losing ground due to the lack of workforce.
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Moldova's exports contracted by 1% y/y to $266.6mn in November as the recovery in exports to the CIS was not strong enough to offset the drop in exports to the EU.
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