ANALYSIS: The construction market is under 4 billion EUR in the first semester

The total value of construction works performed during the first half of 2013 on the local market stood at 3.73 billion EUR (16.3 billion RON), and if in the second half of this year the investment dynamics will not change its current pace, there is a high chance for the domain to record the same value as in the first semester. If we assume that this scenario takes place, at the end of 2013 the construction market in Romania could amount to 7.46 billion EUR, a significant decrease from the level recorded in 2012, when it stood at 9.33 billion EUR, a result similar to the one registered in the previous fiscal year. Thus, according to the trajectory of the local construction sector which has taken place so far (during the first three quarters of 2013), the domain faces a number of threats that could unbalance it again together with the companies active in the industry. The main risks to which the market is subjected are generated by the lack of a politically assumed government vision in what concerns the public investments. Furthermore, the builders accuse the inability of the Government and local authorities to allocate funds and to support with grants the announced projects. "Obviously, we can add to this list the perpetuation of the claim recovery problems, the maintaining of the interest and political influence in the allocation of public works or the aspects concerning legal issues (procurement, FIDIC, excessive taxation, VAT, PPP, insolvency, concession and so on). Furthermore, the development of the branch is jeopardized by the announced administrative reorganization of the state, by the direct competition with companies from the European Union member states in what concerns grant projects in the 2014-2020 period and the opening of the labor market in Central and Eastern Europe starting with next year. Moreover, the entrepreneurs will be affected by the effects of the Alpine GmbH bankruptcy, in the same measure in which they are already by the multiple insolvency proceedings initiated on the local level", said Laurenţiu Plosceanu, the president of the Romanian Association of Construction Entrepreneurs.