Boston, MA -- (ReleaseWire) -- 06/02/2014 -- Our forecasts point to a continued improvement in activity in the Romanian construction sector in 2014 thanks to a brighter economic outlook and continued European funding for the country's ageing infrastructure. While we highlight that the infrastructure sector will outperform over the next two years, the long-term recovery in Romania's construction sector will be buoyed by increased demand for residential and non-residential buildings, as the economy's export driven recovery is translating into a more consumer based story.
With recovery on the cards for Romania's economy and continued support from multilateral institutions, we should begin to see growth in the construction sector improve over 2014 and beyond. Economic uncertainty has held back the residential and non-residential construction sector, but with exports improving the sector will begin to pick up.
- PPPs Begin To Emerge: A new Public Private Partnership law was passed in October 2013, which aims to fix the old PPP (law approved in 2010). Line 7 of the Bucharest Metro is to be procured using the new PPP model. The new 25km metro project is planned to include 30 stops and a depot, with a total project cost estimated at EUR1.5bn (US$2.04bn), taking six years to build.
- Progress on Roads: Vinci, Strabag and Aktor Concession won the race for the 58km Comarnic-Brasov motorway concession, with construction expected to be complete by 2017. The Sebes-Turda highway, part of the Pan-European transport corridor IV which starts in Germany and goes through Prague, Wien, Bratislava and Budapest, has been awarded to Salini Impregilo. The company has also had a contract it was awarded in 2011 cancelled after disagreements over costs with the government - a sign that Romania still holds risks, even in the outperforming road sector.
- Residential and Non-residential construction: An improving economic picture in Romania, thanks to exports to the rest of Europe picking up and boosting wages and job security, should begin to improve confidence in both the retail, commercial and residential sectors over 2013. Industrial construction continues to perform well thanks to buoyant export growth. Over the 2015-2023 period, the sector will average 2.8% y-o-y growth per annum.
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