The constructions market fell by around 17% in 2009, to 11.9billion euros, according to data from the Romanian Builders andContractors Association (ARACO), confirmed by the NationalStatistics Institute (INS), which announced that the gross volumeof construction works was down by 16.7% in the first 11 months of2009, compared with the similar period of the previous year.
In addition, there was a change in the share of investmentsconducted in the private sector. Whereas 2008 saw 70% of workscarried out in the private sector and 30% in the public sector, in2009, the state accounted for 55-60% of the value of works.
"There was a 16-17% decline of the construction market, whichfollowed a 26% increase in the previous year. We expected a verystrong decline, but even so, it was double as much as the GDPdecline," says Laurentiu Plosceanu, chairman of ARACO.
The first 11 months of 2009 saw 19,500 companies become insolvent,most of which were small and medium-sized with construction work astheir core business, with many even going bankrupt. Under thecircumstances, according to market estimates, one in fiveconstruction companies became insolvent in 2009.
"In addition, 70,000 employees were removed from the industry in2009. It is a major economic and social price paid by theconstruction sector because of the crisis, and, unfortunately, wecannot talk about a slowdown of this trend. Short-term forecastsare not very good, considering that there are many unknowns as tofinancing for these projects and to organising tenders for newprojects."
Plosceanu says foreign investors that withdrew from the real estateand the constructions market last year will not return very soon,unless the state provides a more attractive economicframework.
Romania is already competing over foreign capital with othercountries in the region, such as Serbia, Croatia, and Albania,which are in a continuous development.
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