The activity of the Romanian construction sector plunged 23.7 percent year-on-year in May. This is the highest decline in the EU, and more than double the drop in the Union, of 9.6 percent, according to the Statistical Office of the European Communities, Eurostat.
This decline is due to a low volume of public expenditure with infrastructure, which fell 30 percent in the first part of 2009 compared to the first months of 2008, according to businesspeople participating in the Private Government event, a project initiated by Business Standard.
The government investment program is very late, one of the members of the Board of the Romanian Association of Entrepreneurs in the Construction Sector (ARACO), Alexandru Dobre, said. “Some delays are explicable considering the drop in budget revenues, but there is also much hesitation. The stage of talks is not over yet,” he added.
Construction was the only sector which contributed positively to Romania’s gross domestic product in the first quarter of this year, softening the drop to only 6.2 percent, according to data provided by the National Institute of Statistics (INS). For the second quarter, the Private Government estimates that the construction sector started to decline, and the total annual contraction of the economy may have reached 7-7.5 percent. Prime Minister Emil Boc said that part of the expenses with infrastructure scheduled for the fourth quarter could be transferred to the third quarter, to boost economic growth. Economists said that they are skeptical about this announcement, adding that this transfer is not viable, both technically and financially.
