CONTRACTORS: The construction market will not exceed 10 billion EUR in 2014

Amid assumptions about progress towards sustainability of the domestic construction market, most operators in the industry estimated increases between 5% and 50% of their income in 2014, but, as the experts in the industry argue, the market will not exceed this year the 10 billion EUR threshold. According to the Romanian Association of Construction Entrepreneurs (ARACO), 2013 can be characterized by the continuation of the negative trends recorded in the previous years, marked by delays to pay claims, major gaps in the funding of initiated projects and low volume of new works. Moreover, in 2013, the continuing suspension of operational programs, as well as a “metastasis” of insolvencies in the construction sector, along with a permanent presence of the political influence in public procurement was noted. Given that the official data reported about 7.5 billion EUR for the domestic construction market during the first 10 months of 2013, until the end of the analyzed period the expectations were that the total will not exceed 9 billion EUR, down from more than 9.3 billion EUR recorded during the previous 12 months. "With a budget approved very late in 2013, with corrections that have amputated the few projects undertaken and with the collapse of further foreign investments, the quantitative evolution of the sector was reflected in a lower monthly average than the one recorded during previous years. The market was segmented further, and the survival strategies applied by most companies were undermined by the very aggressive competition of the international entrepreneurs, especially for the projects with European funding. The contextual messages show a relative optimism at the end of 2013, connected with the need for economic growth assumed at Community level. The current year is being marked by two electoral events and, usually, there is some growth in these conditions, if the social and political tensions will not undermine the institutional effort of the contracting authorities and others as well. Thus, we expect an improved development of the foreign investments area, mainly from China, although the signals generated by the worsening of the fiscal sector generated unwanted turbulence", said Laurenţiu Plosceanu, president of ARACO.