Construction fever boosts concrete sales

The construction boom is supported by the real estate market, with sky-high demand for apartments, office space and commercial areas, combined with more government investment in infrastructure.

According to the National Statistics Institute (INS), the value of non-residential construction work rose 31.8 percent year-on-year, while the rise for residential buildings amounted to 33.4 percent and that for engineering constructions to 29.2 percent.

This dynamic has led to a spectacular rise in companies producing concrete and construction materials.

The Lafarge group posted a rise worth 83 percent in sales in Romania, far higher than in Poland (61.8 percent) and Russia (63.9 percent). "Romania and Poland also registered outstanding performances because of price variations," according to a Lafarge group financial report. After several months of constant appreciation, the RON is currently depreciating slightly.

However, construction companies are dissatisfied with the lack of qualified personnel and infrastructure projects, the latter continuously changed by the government.

"The market did not rise as expected. All of these public contracts which have been discussed, postponed, or blocked will lead to a narrower H2 year-on-year," according to the Commercial Manager of construction company Macon Deva, Dan Stoian. He added that only 30 percent of the total investment announced by the government has actually begun.

As for the appreciation of the leu, Stoian says it makes imports more atractive and could lead to prices some 25 percent lower. "If we add the euro/leu rate, import products are a further 10 percent cheaper. Due to massive imports, a cubic meter of bricks will be much cheaper than a cubic meter of breeze blocks," Stoian added.