The Romanian construction market recorded a 4% decrease in 2024, compared to the previous year, but compared to 2018 the volume of works was 78% higher, according to Collliers consultants, in an analysis released on Thursday.

„The construction market in Romania maintained a high level of activity in 2024, although it registered a slight decrease of 4% compared to the previous record year, according to data from the National Statistics Institute. Compared with 2018, the volume of work in 2024 was 78% higher, reflecting significant growth in the industry. This development was underpinned by large-scale public investment, together with a stable private sector, although the pace of development varies by segment. However, these investments are closely linked to European funds, which are dependent on the respect of a post-pandemic reform timetable, and the delays in implementing reforms and a budget deficit of almost 9% of GDP raise questions about the future of major projects. Spending cuts are becoming inevitable, which could lead to a slowdown in public investment and a new reprioritization of the sector,” Alexandru Atanasiu, board member & head of construction services at Colliers, explained in a press release sent to AGERPRES.

According to the cited source, the construction market has stepped into 2025 under the pressure of significant challenges, driven by rising material costs, uncertainty of public investment and new fiscal measures affecting the labor force.

„Construction material prices have returned to record levels in 2022, and the budget deficit of almost 9% of GDP calls into question the future of large projects financed by European funds. In addition, the removal of tax relief for construction workers is amplifying the pressure on companies in the sector, which could lead to further cost increases in 2025,” the company notes.

The data centralized by Colliers shows that in 2024, Romania has delivered about 200 kilometers of express roads and thus the national motorway network has grown to about 1,200 kilometers, and currently more than 600 kilometers of motorway are under construction, along with major projects in the railway and health sectors.

„The private sector also still has growth potential, as all segments of the real estate market are less developed than in other Central and Eastern European countries, and the gap with Western Europe is even wider. However, the current economic context has made developers more cautious, and the challenges differ by sector. In the residential sector, uncertainty and administrative bottlenecks have led to projects being put on hold. Industrial developers are also more cautious, amid the slowdown in the European economy, while the retail segment continues to expand, with big projects planned for the coming years,” the consultants say.

They believe that another factor keeping construction costs high has been labor shortages. Compared with pre-pandemic times, the total number of people employed in the economy grew by just 3%, while the construction sector grew by 14%.

Colliers’ consultants predict that by 2025, this dynamic could change with the removal of the income tax exemption for construction workers, with construction companies having to cover the additional costs, which will most likely lead to further price increases.

„In this context, 2025 is shaping up as a year of transition for the Romanian construction market, marked by major adjustments in both the public and private sectors. Rising costs, uncertainties related to public investment and fiscal pressures will force industry players to adapt their plans and find solutions to maintain operational stability. In the long term, the pace of development will depend on the market’s ability to manage these challenges and on the evolution of external factors, such as European financing and the geopolitical climate. In this complex economic landscape, flexibility and efficiency in the allocation of resources will be essential to sustain the long-term growth of the construction sector,” the expert analysis says.

AGERPRES