New Study: Romania Infrastructure Report Q3 2016

Romania's construction industry continues to prove one of the strongest markets in Central and Eastern Europe. The country's significant infrastructure deficit, with ageing transport and utilities networks creating delays and supply insecurity, means there is extensive demand for investment with a number of sectors targeted for expansion and modernisation. EU funding will support a range of projects, including major road and rail improvements under the Transport Master Plan, and public investment in some key gas pipeline and power plant projects is expected. Meanwhile demand for office and retail space is growing, as is the residential construc tion sector. Some risks remain , despite the growth potential, as there are ongoing concerns over transparency and corruption in the market, and several existing projects have been subject to cancellations and delays.

Full Report Details at
- http://www.fastmr.com/prod/1170558_romania_infrastructure_report.aspx?afid=301

Latest Updates A nd Structural Trends

Strong growth in private consumption and wages support our forecasts for healthy increases in residential construction in Romania during 2016. We do note, however, a new law passed in April 2016 releasing mortgage holders from their debt (in exchange for their homes) does create regulatory uncertainty, particularly as a EUR250,000 limit has been set on new mortgages.

Romania's economy is expected to be the fastest growing in Central and Eastern Europe in 2016, and the second fastest in the EU. GDP growth is forecast at 3.9% over the year and is likely to remain over 3% in the medium term.

Domestic economic growth, along with the availability of EU funding for key transport and energy projects, mean we have a positive outlook for the construction industry, with real growth of 9.1% forecast in 2016, followed by 5.4% growth in 2017 and slower growth thereafter.

Risk/Reward Index

Romania's score on the Infrastructure RRI remained broadly on track this quarter at 54.5 out of 100.

Romania's score for Industry Rewards remains 52.5 out of 100 this quarter; EU funding is a positive, however the overall market remains on the small side.

The 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.

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