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New Analysis on Infrastructure Industry in Romania

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Jan 29 2011

Research and Markets has announced the addition of the "Romania Infrastructure Report Q1 2011" report to their offering.

Business Monitor International's Romania Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Romania's infrastructure industry.

New data shows that the construction sector shrank in real terms by 13.6% in 2009, a slightly worse performance than our earlier estimate of 12.1%. Unfortunately, construction data for H110 has surprised on the downside in a much more pronounced fashion.

The sector underwent a decline in real terms of over 15% in annualised terms during the first half of 2010, partly reflecting a much weaker than expected performance by the economy as a whole.

Gross fixed capital formation (a key driver of construction activity) was particularly weak in the first half of the year.
Further reason for pessimism is generated by a renewed dip in overall economic growth in Q3 2010; data released in mid November 2010 showed that the economy contracted by 0.7% quarter-on-quarter (q-o-q), after rising by 0.3% q-o-q in Q2 2010.
In year-on-year terms, the contraction in Q3 2010 was 2.5%, compared to 0.5% in Q2 2010. Against this backdrop, we forecast Romania's construction sector will shrink by 15.7% in 2010 as a whole, to reach a nominal value of RON44.3bn. We expect only a modest construction market recovery in 2011, with sector growth predicted to be 4.3%. This largely reflects what will likely be an anaemic recovery of the wider economy, given the renewed general local economic weakness encountered in Q3 2010. The sector recovery should then pick up pace from 2012, with construction growth reaching 7.5% in real terms that year, before a gradual acceleration to just under 10% in 2015.

We anticipate that the growth of the country's infrastructure sector will lag slightly behind that of the construction sector as a whole over the period 2011-2015, in part due to a slightly less savage downturn than over the period 2009-10, in relative terms. The construction sector as a whole is more cyclically sensitive than infrastructure, since the latter has a higher weighting of public sector investment. This is not to say, however, that the infrastructure sector has not suffered during the present downturn."

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