Romania Infrastructure Report Q2 2016 - New Study Released

From: Fast Market Research, Inc.
Published: Tue Feb 16 2016

A change of government in late 2015 has not substantially altered our positive outlook for Romania's construction sector going forward. Demand in the residential sector continues to grow, driven by rising household income rates and falling unemployment, as well as short-term tax cuts. In the transport sector, major funding from the European Union is supporting development of road and rail connections, though we note airports remain neglected. The outlook in the power sector is more subdued, with high-profile nuclear power projects subject to ongoing delays. While expanding public spending will support growth through to 2020, over the remainder of the forecast period, growth will be more subdued as foreign funding declines.

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Latest Updates A nd Structural Trends

Romania is proving increasingly attractive to foreign investors. Foreign direct investment (FDI) into the country increased by nearly EUR1.2bn (USD1.3bn) in the first 10 months of 2015 to reach EUR2.8bn (USD3.0bn), according to data released by Banca Nationala a Romaniei.

Government spending is expected to remain one of the key drivers of growth over 2016 and 2017 and we do not expect the formation of a new technocrat government in late 2015 to detail the positive growth trajectory, with GDP anticipated to grow by 3.6% in 2016 and by 3.7% in 2017.

This growth supports our forecasts for construction industry value growth of 7.0% in 2016 and 5.6% in 2017, though as public spending comes under greater pressure over the medium term, we expect growth to slow to low single digits.

Risk/Reward Index

Romania's score on the Infrastructure Risk/Reward Index declined slightly this quarter, to 54.3 out of 100 compared to 55 last quarter.

Romania's score for Industry Rewards is 52.5 out of 100 this quarter as the overall market remains small, despite EU funding.

Its Industry Risks score is once again 40 out of 100, as foreign investors have been discouraged by corruption (eg the ongoing corruption scandal related to former Prime Minister Victor Ponta), political uncertainty and a lack of transparency.

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.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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