ECSO CFS Romania 2018

European Construction
Sector Observatory
Country profile Romania
June 2018
European Construction Sector Observatory
In a nutshell
The economic crisis had severe repercussions on the Romanian The important cut in public spending on infrastructure projects over
economy and, consequently, on the construction sector. However, the last years has severely affected the quality of infrastructure, espe-
in recent years, the Romanian construction sector has been recovering. cially roads and highways, and was coupled with poor absorption of EU
In fact, there were 89,943 enterprises in 2016 in the broad construction funds and questionable public procurement transparency. However,
sector, a 7.6% increase since 2010, whereas employment increased less considerable investments are planned through the General Master Plan
significantly by 2.9% since 2010, reaching 608,715 people in 2016. Simi- for Transport, which details strategic interventions in transport infra-
larly, production in construction increased by 1.8%, with an impressive structure up until 2030, for a total value of EUR 43.5 billion (with EUR
21.4% increase in the production of buildings but a 9.7% in civil engi- 27.1 billion for road and EUR 10.2 billion for railway projects). In addi-
neering production over 2010-2016. Profitability also picked up, with tion, Romania benefits from EUR 9.5 billion from the EU Regional Funds
the turnover of the broad construction sector increasing by 19.8% to under the 2014‑2020 Large Infrastructure Operational Programme
reach EUR 30.6 billion in 2016. (LIOP), to be invested in transport, environment and energy projects.
Given the poor energy efficiency condition of the building stock,

Number of enterprises in the Romanian
broad construction sector increased
between 2010-2016
7.6% Romania is taking action to stimulate its renovation, focusing particu-
larly on residential buildings. The Thermal Rehabilitation Programme,
with a budget of EUR 8.8 billion for 2017, covers up to 80% of the costs
incurred for thermal rehabilitation interventions of apartment blocks.
Residential construction and the housing market suffered However, the construction industry is facing considerable pressure,
following the crisis, with house prices decreasing by 18.7% between particularly in insulation and thermal rehabilitation, with 50,000 such
2010 and 2014, but subsequently picking up by 9.0% until 2016. The workers being estimated to be needed by 2020 to satisfy this demand.
number of issued residential building permits fell significantly in the To this end, both public and private training initiatives were introduced
aftermath of the crisis but is recovering and has reached 35,496 for to upskill the workforce.
the first ten months of 2017. Moreover, despite having the highest
homeownership rate, Romania reports an above average housing Infrastructure and residential construction are predicted to drive the
cost overburden rate, highlighting housing affordability issues, as well revival of the Romanian construction sector in the future, with growth
as the highest overcrowding and severe housing deprivation rates in forecast at an annual rate of 2.0% in 2018, 3.8% in 2019 and 5.4% in
the EU, underscoring poor housing conditions. To address these issues 2020. However, improved absorption of EU funds, better project selec-
whilst stimulating residential construction, the government introduced tion and management and greater procurement transparency are
several schemes, such as the First Home Programme with a budget essential to ensure the sustained expansion of the sector.
of RON 2 billion (EUR 428.8 million) for 2018, which provides state
guarantees of up to 50% of the value of the mortgage. Furthermore,
the National Housing Agency implements several affordable home
programmes, including the Rental Housing Units for Young People
Infrastructure and residential construction are
and the Mortgage-financed Dwellings Programme.
predicted to drive the revival of the Romanian
Production in the construction of buildings
increase between 2010 and 2016 construction sector in the future, with growth fore-
House price trends cast at an annual rate of 2.0% in 2018, 3.8% in 2019
-18.7% +9.0% and 5.4% in 2020.
2010 2014 2016
2
Country Fact Sheet Romania
1
Key Figures
The number of enterprises in the broad construction sector in In 20162, the total value added of the broad construc-
Romania totalled 89,943 in 20161 (Figure 1). Companies in the narrow tion sector was EUR 9.4 billion (Figure 3). The construc-
construction sector accounted for 58.9% of the total, followed by archi- tion sub-sector had the largest share (54.4%, i.e. EUR
tectural and engineering activities (16.9%), real estate activities (16.0%)
5.1 billion), followed by real estate activities (17.7%,
and manufacturing (8.2%). The overall number of enterprises in the
broad construction sector increased by 7.6% between 2010 and 2016.
i.e. EUR 1.7 billion), manufacturing (15.0%, i.e. EUR 1.4
After a drop in 2011 from 83,559 to 74,673 enterprises, this number billion) and architectural and engineering activities
increased continuously driven by the 16.8% growth in companies in (12.9%, EUR 1.2 billion).
architectural and engineering activities, the 7.3% growth in companies
in the narrow construction sector and the 6.1% growth in companies
in real estate activities. Production in construction increased by 1.8% The share of gross value added of the broad construction sector in
over 2010-2016. Specifically, production in construction of buildings the GDP3 reached 17.2% in 2014, with real estate activities having the
increased by 21.4%, while production in civil engineering experienced largest contribution (8.1%) (Figure 4). This is in line with EU-28 average
a 9.7% fall over the same period (Figure 2). which stands at 16.9%.
Production in construction
Figure 3: Value added in the construction sector in Romania in
change, 2010-2016
2016 (EUR m)
10000
1213.080843
Figure 1: Number of enterprises in the construction sector in 8000
1662.342896,
Romania over 2010-2016 6000
4000 5111.623535
55,000
2000
45,000
1405.981169
35,000 0
Architectural and engineering activities
25,000
Real estate activities
15,000
Construction
5,000 Manufacturing
2010 2011 2012 2013 2014 2015 2016
Source: Eurostat, 2017.
Manufacturing
Construction
Real estate activities
Architectural and engineering activities
Figure 4: Gross value added as a share of GDP in the construction
sector in Romania in 2014 (%)
Figure 2: Volume index of production in the Romanian construc-
tion sector over 2010-2016 (2010=100)
125 1.1
120
115 8.1
110
105 6.2
100
95
1.8
90
85
80 Architectural and engineering activities Real estate activities
2010 2011 2012 2013 2014 2015 2016 Construction Manufacturing
Volume index of production - construction Source: Eurostat, 2017.
Volume index of production - construction of buildings
Volume index of production - construction of civil engineering
3
2
Macroeconomic Indicators
In 2016, Romania’s GDP amounted to RON 631.3 billion (EUR 135.5 Romania was severely hit by the crisis in 2008, and was therefore
billion), representing a 4.8% increase since the previous year and granted a EUR 20 billion bailout package from the IMF, European
exceeding the 2010 level by 18.2%. The same year, the country’s poten- Commission and World Bank in 20095. Its fiscal situation has been
tial GDP was RON 631.8 billion (EUR 135.6 billion), resulting in only a improving over time. In 2016, the general government expenditure
very slight negative output gap. The inflation rate increased to 6.1% in Romania represented 34.7% of GDP, below the EU-28 average of
in 2010 but has been gradually and constantly decreasing since then 46.6%. Furthermore, the country achieved a government deficit of
to drop to -1.1% in 2016. The unemployment rate in Romania stood -3.0% of GDP in 2016, in line with the 3% threshold of the EU’s Stability
at 5.9% in 2016, below the EU-28 average of 8.5% and the lowest since and Growth Pact (SGP) and a considerable improvement since the
2010, though still above pre-crisis value. Youth unemployment (below peak in 2009 (-9.5%). However, after a continual improvement since
the age of 25) stood at 20.6% in 2016, above the EU-28 average of 2010, 2016 marks an important deterioration from the situation in
18.7% and above pre-crisis levels4. 2015, when government deficit stood at -0.8%. The general govern-
ment gross debt amounted to 37.6% of GDP in 2016, well below the
EU-28 average of 83.5% but above the 2008 value (13.2%). The offi-
Unemployment rate, 2016 cial interest rate of the Romanian Central Bank (Banca Naţională
a României) has shown a generally decreasing trend between 2010
and 2016, falling from 7.3% to 1.8%, respectively. This is as a reaction
to the decreasing inflation rate, and reflects the Bank’s aim to support
lending in domestic currency, stimulate investments and accelerate
economic growth.
The total population of Romania amounted to 19.8 million people in

In 2017, Romania jumped to the 45th position out
2016. It is projected to drop to 19.3 million by 2020 and further down
to 16.3 million in 2050. In parallel, the negative net migration from
of 190 countries in terms of ease of starting a busi-
the country (-53,944 people in 2016) will contribute to the population ness, according to the Doing Business 2018 report, an
decline, potentially affecting the supply of workers. In 2016, Romania’s important increase from its 62th position the previous
working age population accounted for 67.1% of the total and is year.
projected to decrease considerably in the future to 55.3% of the coun-
try’s population by 2050. The population aged 65 or older accounted
for 17.4% and it is forecast to reach 29.8% by 2050. Together, the nega- Completing all formalities to register a new firm takes 12 days, above
tive net migration and demographic decline are expected to drive the the OECD high income average of 8.5, and entails 6 procedures, above
demand for hospitals and care homes. the average of 4.96. The costs incurred account for 0.4% of income
per capita, considerably below the OECD average of 3.1%, and the
required paid-in minimum capital is only 0.5% of income per capita,
compared to the average of 8.7%. According to the SBA Fact Sheet
2017, Romania performs above the EU average in the area of entre-
preneurship, in line with the 2016 results. The country presents a high
proportion of adults intending to start a business in the next three
years (29% compared to the EU average of 12.1%), high early stage
entrepreneurial activity (including among women) and high media
attention given to successful entrepreneurs.
Total population of Romania
4
between 2010 and 2012, from RON 104.6 billion (EUR 22.4 billion) to
RON 118.8 billion (EUR 25.5 billion), loans to non-financial corpo-
Romania performs above the EU average in the rations declined by 14.4% over 2012-2016, reaching RON 101.6 billion
area of entrepreneurship, in line with the 2016 (EUR 21.8 billion) in 2016. Financial support to SMEs is amongst other
results and presents a high proportion of adults sources provided through EU funding. The European Investment Fund
(EIF) managed the EUR 225 million JEREMIE (Joint European Resources
intending to start a business in the next three
for Micro to Medium Enterprises) initiative, through which a portfolio
years. risk sharing loan, portfolio guarantee and equity fund were created,
allowing the provision of 6,000 new loans to SMEs and investments
totalling over EUR 600 million. As a continuation of the programme,
the EIF signed an agreement in September 2016 establishing the EUR
Romania ranked 68th in the World Bank’s 2017-2018 Global Competi- 59.3 million Competitiveness Fund-of-Funds for SMEs, EUR 40 million of
tiveness Report in terms of financial market development7. The best which will be dedicated to entrepreneurship and seed funds for inno-
performing indicator is soundness of banks (79th) Conversely, Romania vative companies and EUR 19 million to a risk-sharing loan instrument8.
ranks 119th for ease of access to loans, affordability of financial services In addition, the EIF manages the SME Initiative, launched in Romania in
and financing through local equity market while it ranks 126th for 2016, which is expected to generate over EUR 540 million of new SME
venture capital availability. Indeed, access to financing is reported to loans at favourable terms through a risk-sharing mechanism9.
be the first barrier for doing business, followed by inefficient govern-
ment bureaucracy and tax rates. Despite an overall 13.5% increase
5
3
Key economic drivers of the
construction sector
Productivity Profitability
Despite some fluctuations, labour productivity in the broad construc- The turnover of the broad construction sector is currently recovering
tion sector experienced a 15.0% increment between 2010 and 2014, from the fall it experienced during the crisis. In fact, between 2010
from EUR 13,358 to EUR 15,361 (Figure 5). This is significantly lower and 2016, turnover increased by 19.8% from EUR 25.5 billion to EUR
than EU-28 average, which stood at EUR 50,200 in 2014. The architec- 30.6 billion, while still being below pre-crisis levels. Specifically, turn-
tural and engineering activities sub-sector saw the highest increase over in the architectural and engineering activities increased most, by
in productivity, growing by 53.3% from EUR 13,300 to EUR 20,400 46.4% from EUR 1.7 billion to reach EUR 2.5 billion. Turnover in the
between 2010 and 201610. This was followed by real estate activi- manufacturing sub-sector also increased significantly, from EUR 4.4
ties, which increased by 37.9% from EUR 23,300 to EUR 36,300 over billion in 2010 to reach EUR 5.8 billion in 2016, representing a 20.3%
the same period. Furthermore, the construction and manufacturing increase. Similarly, gross operating surplus has been recovering since
sub-sector both increased, by 6.2% and 4.3% respectively. The former the crisis, reaching EUR 5.3 billion in 2014, an 8.4% increase from 2010,
increased from EUR 11,700 to EUR 12,400, while the latter increased when it stood at EUR 4.9 billion. The gross operating rate of the broad
from EUR 14,600 to EUR 15,300. construction sector11, which gives an indication of the sector’s prof-
itability, increased by 9.9% between 2010 and 2014, comparable to
pre-crisis levels. In parallel, construction costs for residential buildings
Figure 5: Labour productivity in the construction sector in Roma- have generally seen an increasing trend, with the construction cost
nia over 2010-2016 (EUR k) index rising by 10.6% over 2010-2016, spurred by the 32.3% increase in
labour costs (Figure 6: Construction cost index for residential buildings
over 2010-2016 (2010=100)).
Turnover of the broad

construction sector

Figure 6: Construction cost index for residential buildings over
2010-2016 (2010=100)
Labor productivity in the broad construction sector
6
The number of self-employed workers in the construction sub-sector

Employment
has been fluctuating in recent years, peaking at 177,800 in 2010 and
In 201612, the broad construction sector employed 608,715 people, slightly decreasing to 174,100 in 2016. Their share in the total number
2.9% more compared to 2010, but almost 200,000 less workers than in of self-employed persons in the general economy went up from 10.5%
2008. The construction sub-sector employed 411,280 people in 2016, in 2010 to 13.0% in 2016.
followed by manufacturing, architectural and engineering activi-
ties and real estate activities (Figure 7). All sub-sectors experienced
SMEs have been playing an increasingly important
increases in employment between 2010 and 2016. Specifically, employ-
ment in architectural and engineering activities increased most from
role in terms of employment, since they employed
53,191 to 59,503, representing an 11.9% increase. With regards to the 84.7% of the total workforce of the broad construction
other three sub-sectors, employment increased by 3.3% in real estate industry in 2014, compared to 80.1% in 2010.
activities, by 2.1% in the narrow construction sector and by 1.4% in
the manufacturing sub-sector. As for employment by specific occu-
pation, the number of technicians and associate professionals in the Business confidence
construction sub-sector saw the largest decline, from 30,900 in 2010
to 19,600 in 2016 (-36.6%), followed by managers in the manufacturing Consumer confidence
sector, dropping from 29,700 to 20,000 (-32.7%). Plant and machine
operators were the single largest occupation in the sector, which
increased by 5.7% over the same period, from 413,200 to 436,700.
Number of people employed in the broad

construction sector, change 2010-2016
The consumer confidence indicator has been negative since 2000,

bottoming out in 2010 at -54.6 following the crisis. Despite some fluc-
tuations, it has been improving since then, reaching -18.8 in 2016, close
Figure 7: Percentage of people employed by construction to pre-crisis levels. Similarly, industry confidence dropped increased
sub-sectors in Romania in 2016 from -8.4 in 2010 to reach 0.4 in 2016, again close to pre-crisis levels.
After dropping to -40.8 in 2010, the construction confidence indi-
cator increased to -13.1 in 2016. Overall, confidence in Romania is
lower than the EU-28 average, which respectively stood at -3.6, 3.2 and
-6.7 for the three indicators above. Similarly, investment per worker
increased to EUR 67,526 in 2014, i.e. 45.5% above the 2010 value (EUR
46,402). Conversely, investment ratio did not pick up between 2010
and 2016 and remains below its pre-crisis levels. In fact, over that
period it decreased from 25.9% to 23.1%. Yet, this is still above the
EU-28 average which amounted to 19.8% of GDP in 2016.
7
Domestic sales Export of construction-related

products and services
The ranking of the most domestically sold construction products has The 5 most exported construction products, both in Romania and
remained constant in Romania between 2010 and 2016. The value of in the EU (Table 2) accounted for 66.0% of all construction exports
domestic sales of ‘Other structures’ and ‘Builders joinery and carpentry’ from Romania in 2016. The ranking of the most exported products has
experienced a 22.4% and a 25.7% decrease over 2010-2016, respec- remained relatively stable since 2010. Moreover, the value exported
tively. Conversely, ‘Prefabricated buildings of metal’ saw a 27.0% of ‘Particle boards and similar’ has stayed constant between 2010 and
increase in their domestic sale values. The top 5 most domestically 2016 at EUR 160 million, while it had increased to EUR 408 million in
sold construction products, both in Romania and in the EU, are 2013. Conversely, the exported value of ‘Builders’ joinery and carpentry’
presented in Table 1. Together, these made up 58.4% of all Romanian increased by 373.3% over the same period, from EUR 23.7 million to
construction products sales in 2016. reach EUR 112.0 million.
Table 1: 5 most domestically sold construction products in Romania Table 2: 5 most exported construction products in Romania and in
and in the EU in 2016 the EU in 2016
Romania EU-28 Romania EU-28
Product Value Share in Product Product Value Share in Product

(EUR m) construction (EUR m) construction
product product
domestic domestic
sales (%) sales (%)
Portland cement, Other Particle boards Ceramic tiles

aluminous cement, 467.4 17.2 structures and similar (group 160.5 25.7 and flags
etc. (group 235112) (group 251123) 162113) (group 233110)
Prefabricated buildings Doors, Builders’ joinery and Other structures

404.5 14.9 carpentry of wood, 112.0 17.9 (group 251123)
of metal windows, etc.
(group 251110) (group 251210) etc. (group 162319)
Ready-mixed
concrete Ready-mixed Other structures Marble, etc.
(group 236310) 266.4 9.8 concrete (group 251123) 73.7 11.8 (group 237011)
(group 236310)
Other structures Prefabricated

(group 251123) 259.4 9.6 buildings
of metal
(group 251110) Windows, French Prefabricated
windows and their 36.1 5.8 buildings of
frames, etc. (group metal (group
Builders joinery and Prefabricated 162311) 251110)
184.8 6.8
carpentry, of wood, structural
n.e.c. (group 162319) components for
building or civil Towers and lattice Builders’ joinery
engineering, etc. masts of iron or steel 30.6 4.9 and carpentry of
(group 236112) (group 2251122) wood, etc. (group
162319)
Source: PRODCOM, 2017. Source: PRODCOM, 2017.
In terms of cross-border provision of construction Specifically, 83.5% of exports (EUR 333.7 million) were made to the
services, Romania exported EUR 399.8 million world- EU-28, i.e. 3.6% below the 2013 level (EUR 346.2 million). Similarly, the
value of exports to countries outside the EU-28 decreased slightly, at
wide in 2016, 4.4% below the 201313 value (EUR 418.2
EUR 66.1 million in 2016. In parallel, Romania imported a total of EUR
million). This is an improvement over 2015, when 105.4 million in construction services from the world in 2016, a 47.2%
exports stood at EUR 373.6 million. drop since 2013 (EUR 199.6 million), with EUR 76.6 million from EU-28
countries (i.e. 72.7% of imports). Romania therefore reported a trade
surplus of EUR 294.4 million in 2016.
8
Access to finance in the 35.0% of the population lives in cities and greater
construction sector cities which, combined with population decline and
After a sharp increase during the crisis and until 2013, the value of negative net migration, may slow down the demand
credit extended to the narrow construction sector in Romania for new residential construction.
showed a strong negative trend. Overall, over the 2010-201614 period,
credit extended decreased from RON 307.9 billion (EUR 66.0 billion) to However, a number of factors have contributed to a revival of the
RON 21.9 billion (EUR 4.7 billion), a 92.9% drop. Nevertheless, between demand on the real estate market. The mean equivalised net
January and September 2016, 26.4% of new loans issued by banks income has increased by 19.1% since 2010 amounting to RON
went to the construction and real estate sectors, the highest share 11,884 (EUR 2,622) in 2015, giving households a larger purchasing
across sectors in the general economy. power. In parallel, mortgage rates have fallen continuously since
the peak in 2009, from 11.1%. In fact, between 2010 and 2016, rates
have decreased from 10.8% to 3.4% (Figure 8). Consequently, total
outstanding housing loans to households have experienced a 71.1%
surge since 2010, from EUR 6.7 billion to EUR 11.5 billion in 2015, also
Due to their lower ability to cope with adverse spurred by policy schemes such as the First Home Programme, to
economic conditions, construction and real which almost 50% of total outstanding housing loans can be ascribed18
estate companies have a limited borrowing (see Policy schemes).
potential, being less able to qualify for new
loans. Figure 8: Mortgage rates for loans for over 5 years original
maturity (%)
In general, due to their lower ability to cope with adverse economic

conditions, construction and real estate companies have a limited
borrowing potential, being less able to qualify for new loans. Further-
more, they report the highest credit risk, with a non-performing loan
ratio of 30.6% for construction and 19.3% for real estate companies in
September 201715. This is, however, a significant improvement from
September 2016, when the non-performing loan ratio stood at 35.9%
for construction and 26.8% for real estate companies in September
2016, the highest across all sectors in the economy. A recent survey
of companies done by the EIB shows that around 7% of firms in the Source: ECB MFI Interest Rate Statistics, 2017.
manufacturing sector are finance constrained16 and about 12% in

the construction sector. Moreover, about 15% of firms in the manu-
facturing sub-sector and in the narrow construction sector reported
investing too little17.
The house price index change,
2010-2016 11.4%
Access to housing
On the supply side, construction of residential buildings has been
picking up, supported by the decline in construction costs and the
recovering housing prices. The house price index (for total dwell-
ings) had undergone a 18.7% decrease between 2010 and 2014, subse-
quently picking up by 9.0% until 2016, though still 11.4% lower than
2010 (Figure 9). The recovery of property prices has been particularly
noticeable in Romania’s largest cities, such as Bucharest (+12.6% from
January to September 2017), Brasov (+11.0%), Constanta (+13.4%),
Timisoara (+9.4%) and Cluj-Napoca (+16.4%)19.
Number of households In parallel, between 2010 and 2016, issued residential building
permits decreased by 8.4%. However, the number of issued building
The number of households in Romania reached 7,470,000 in 2016, permits for dwellings increased to 37,672 in 2014, and to 39,112 in
0.9% higher than 2010 (7,402,000), but lower than in the early 2000s. 2015 (+3.8% relative to 2014)20. Nevertheless, in 2016, 38,653 building
9
permits for dwellings were issued, i.e. 1.2% lower than 201521. For the Infrastructure
first ten months of 2017 this number stood at 35,496 units. These
figures are still below the peak of 61,092 in 200822. Overall, residential According to the 2017-2018 Global Competitiveness Report, Romania
construction output has been improving since 2014, with 47,017 new ranks 83rd out of 137 economies in terms of its infrastructure30. It
dwellings being completed in 2015 (+10.4% compared to 42,589 in performs particularly poorly in terms of the quality of its roads (120th),
2014) and 52,206 (+11.0) in 201623. air transport (89th) and port infrastructure (92nd) and slightly better
with regard to the quality of its railroad infrastructure, ranking 73th.
Figure 9: House price index in Romania over 2010-2016

(2010=100)
The poor quality of Romanian infrastructure

stems from the lack of a structured framework
for the selection, prioritisation and execution
of public infrastructural projects, and the domi-
nance of large and inefficient state-owned
companies, particularly in the transportation
network.
Source: Eurostat, 2017. The poor quality of Romanian infrastructure stems from the lack of a
structured framework for the selection, prioritisation and execution
The homeownership rate in Romania is the highest of public infrastructural projects, and the dominance of large and in-
in the EU, with 96.0% of the population owning their efficient state-owned companies, particularly in the transportation
network. As a result, the government’s project pipeline is clogged
own property in 2016 (compared to the EU-28 average
with old projects, with excessively long implementation periods and
of 69.5% in 2015). low prospective completion rates31. Moreover, political interference
and the lack of professional capacity to manage large projects are
This share does not display major differences between the popula- stressed as important hurdles in the development of infrastructures
tion whose income is above or below 60% of the median equivalised in Romania. Particularly, changes in political priorities and corruption
income, with the homeownership rate standing at 96.5% and 94.3% have stifled investments and blocked the deployment of EU Funds,
for the two income groups, respectively. However, the housing cost crucial in the construction of new infrastructures. Investment in infra-
overburden rate24 was at 14.4% in 2016, above the EU-28 average of structure32 is further discussed in section TO 1 - Investment conditions
11.1%25, highlighting housing affordability issues. Moreover, housing and volumes.
quality in Romania is poor, with the overcrowding rate26 in 2016 be-
ing at 48.4%, well above the EU-28 average of 16.8% and the worst in
the EU27. Similarly, the severe housing deprivation rate28 reached
19.8% in 2016, again, well above the EU-28 average of 4.8% and the
worst in the EU29.
Severe housing deprivation

rate, 2016
10
4
Key issues and barriers in the
construction sector
structure. Some of the Romanian residential developers have started to
Late payment
create their own financial systems, whereby the buyer may put a down
Company failure
payment in monthly instalments over a maximum period of five years,
and can take a loan to cover the remaining amount that is usually 40-50%
The broad construction sector has generally seen an increase in the of the value of the property35, being an alternative to mortgage loans.
number of company births and a decrease in company deaths across
all sub-sectors between 2010 and 2014. Namely, company births in
the construction sub-sector increased from 4,559 in 2010 to 7,600 in The Romanian construction sector has a
2014 (+66.7%), whereas the number of deaths decreased from 10,038 continued history of late payments, particularly
to 7,932 (-21.0%). Company births in the architectural and engi-
from the public administration.
neering activities sub-sector increased from 638 in 2010 to 1,839 in
2014 (+188.2%), whereas company deaths decreased from 2,596 to
1,419 (-45.3%). Company births in real estate activities also increased
from 957 to 1,824 over 2010-2014 (+90.6%), whereas company deaths The Romanian construction sector has a continued history of late
decreased from 2,003 to 1,426 (-28.8%). payments. Despite the transposition of the 2011 Late Payment Direc-
tive with Legea 72/2013 in April 2013, payment culture is still worri-
The construction industry ranks second in the Romanian economy for some, particularly from the public administration36. The country also
the number of insolvencies, after the retail and wholesale sector. has the largest share in Central and Eastern Europe (CEE) of construc-
According to the National Trade Registry’s Office, 1,518 construction tion companies paying their suppliers late. Romanian construction
firms went insolvent in 2015, while this number dropped to 1,290 in and real estate companies accounted for 16% of the total overdue
2016 before increasing in 2017 to reach 1,472. This is a remarkable payments of non-financial corporations in 201437. More recently,
48.7% decrease from 2,870 in 201433. As for real estate services, 250 Romania made some progress in reducing the amount of time it takes
companies were declared insolvent in 2017, a 74.3% decrease since for payments to be made, however the number of invoices, which are
2014 (971). Insolvencies in real estate activities represented 2.7% of never paid, stood at 4% in 2017, the highest in the region38.
total insolvencies, while this stood at 16.2% for construction firms34.
According to European Payment Report, payment terms on average
Despite these improvements, the Romanian Association of the Roma- allowed by businesses to their customers (B2C) reached 21 days, 31
nian Building Industry (Asociaţia Româna a Antreprenorilor de days for B2B and 35 for PA2B in 2017. The average time taken by
Construcţii - ARACO) states that, in order to truly reduce the number of customers (B2C) to pay was 15 days, 28 days for B2B and 40 days for
insolvencies and redundancies in the sector, government measures for PA2B. Although the Payment Index shows an improving trend with a
a sounder financial support of European programmes and investments slight increase going up from -0.3 in 2016 to 0.1 in 2017, the perfor-
are essential. Not enough effort put into the restructuring of insolvent mance of late payments in public sector is still poor39. Debtors in finan-
construction companies, since it is more lucrative for legal administra- cial difficulties and administrative inefficiency are main causes of late
tors to liquidate insolvent businesses. In fact, they cash around 10% of payments.
the total value of the liquidated assets, without therefore being incen-
tivised to restructure the insolvent businesses. According to Days Sales Outstanding (DSO), payment duration in the
construction sector in Romania is on average between 90 to 120 days,
below the national average of 73 in 201740, and the level of protracted
Trade credit payments remains high. As construction projects usually take an
extended amount of time to be finished, buyers depend heavily on
In the Romanian construction sector, trade credit is not a common protracted payments, which is increasing the risk in the value chain.
source of finance for operations. More widespread forms of financing Similarly, public sector institutions are taking more time to make
of construction activities are debt finance and equity finance. Public payments than private companies, which contributes to overall late
authorities sometimes use mezzanine finance and bond issues to payment practices41. Moreover, the construction sector reports the
obtain funding for public buildings or rehabilitation of public infra- highest percentage of companies with up to 30 days of delay in
11
payment, amounting to 31%. Conversely, the manufacturing sector in

stands as the best sector with regards to payment in time, with 31% of Time to Associated
Procedure
complete costs
companies doing so42.
Obtain project clearance from 15 days RON 95 /
Time and cost of obtaining building the electric power supply
authority
EUR 20
permits and licenses

Obtain updated land registry 2 days RON 20 /
excerpt EUR 43
Romania ranked 150th out of 190 in 2017 in ‘Dealing
with Construction Permits’, according to the World
Bank’s Doing Business Report 2018. This is a signifi- Sign contract with the solid 1 day RON 2,667 /
waste authority EUR 572
cant drop from its 95th rank in the previous year.
Notarize statement about non-
1 day RON 15 /
existence of land disputes
Building a warehouse requires 24 administrative procedures (above EUR 3.2
the OECD high-income average of 12.5) and four more than the year Register project with the Order
before. It takes 260 days (well above the 154.6 average) and again, of Architects & pay architecture 1 day RON 989 /
stamp duty EUR 212
well above 2016 (Table 3)43. The estimated cost is 2.1% of the cost of
the warehouse, slightly higher than the OECD high-income average of Obtain building permit 30 days RON 18,777 /
1.6%. Namely, obtaining the urban planning certificate is an essential EUR 4,028
requirement, since it defines the relevant technicalities (utilities, acces-

sibility, proximity, height of the building, land use, etc.) but it does not Notify the City Hall of the start of 1 day no charge
construction works
allow the initiation of the works44. The building permit is thus required,
which takes 30 days to obtain and costs RON 18,777, which continuously Notify the Bucharest Construc- 1 day RON 11,266
increased since 2015. Once obtained, it is valid for 12 months, setting tion Inspectorate of start of / EUR 2416
construction works & submit
the maximum timeframe for the start of construction. Upon comple- schedule of inspections
tion of the building, it takes 129 days to obtain the final assessments,
including 75 days for water and sewage connection45. Notify the Bucharest Labour 1 day no charge
Inspectorate of the start of
construction
Table 3: Construction procedures timing and costs in Romania
Receive foundations work no charge
1 day
inspection
Time to Associated
Procedure
complete costs
Receive frame inspection 1 day no charge
Obtain topographical docu- 7 days RON 2,000 /
mentation EUR 429 Notify City Hall of completion
of works and request final 15 days no charge
assessment
Obtain approval of topo- 15 days RON 220 /
graphical documentation and EUR 47 Notify Bucharest Construction
land registry excerpt Inspectorate of completion of
construction & request final 75 days RON 2,300
assessment / EUR 493
Obtain urban planning certifi-
30 days RON 14 /
cate (Certificat de Urbanism)
EUR 3
Receive final inspection and 30 days no charge
obtain final assessment from the
Obtain project clearance from Acceptance Commission
Environmental Protection 21 days RON 500 /
Agency EUR 107
Obtain water and sewage 75 days RON 2,300 /
connection EUR 493
Obtain project clearance from
water supply and sewerage 18 days RON 72 /
EUR 15 Obtain certification attesting the 30 days No charge
authority
existence of the construction
from the City Hall
Obtain project clearance from 15 days No charge
Health Department
Register the building with the 7 days RON 999 /
Real Estate Registry EUR 214
Obtain project clearance
from General Inspectorate for 7 days RON 250 /
Emergency Situations EUR 53.6
Source: Doing Business overview for Romania, Word Bank, 2017.
12
Skills shortage Training courses for these professions last two months, improving sal-
ary expectations by up to 15%. In fact, due to the low wages, the best
The number of job vacancies in the construction sub-sector decreased and most skilled workers often prefer to work on their own account
by 50.8% between 2010 and 2013, from 1,565 to 770. Nevertheless, and migrate to third countries offering higher salaries48. To prevent
they have been picking up since then, reaching 1,479 in 2015, though the migration of skilled workers and therefore address labour short-
still much lower than before the crisis hit. On the other hand, in real ages, the Federation of Owners of Building Companies (Federatia
estate activities the number of vacancies has recovered by growing Patronatul Societatilor din Constructii – PSC) believes that wages
419.2% between 2010 and 2015 from 26 to reach 135. In parallel, in the sector should be increased and even doubled over the coming
adult participation in education and training in the construction years, so as to attract back to Romania skilled workers who left49.
sub-sector was a mere 2.2% in 2013, though higher than 2009 (1.2%).
Moreover, the number of tertiary students in engineering, manufac-
turing and construction decreased by 39.0% from 37,596 in 2010 to
reach 22,929 in 2015. Specifically, tertiary students in architecture and Sector & sub-sector specific issues
building dropped by 10.1% from 4,416 to 3,971 over the same period. Material efficiency and waste management
In 2014, 422 million tonnes of construction and demolition (C&D)

Number of tertiary students in engi- waste were collected (compared to 481 million tonnes in 201250),
neering, manufacturing and construction accounting for 8.5% of the total collected waste51. Although there is
currently no specific legal framework governing the management
of C&D waste, art.17 of the Law nr. 211/2011 defines the obligation
to achieve a level of valorisation of 70% of the mass of the non-haz-
ardous waste from construction and demolition activities in 2020, in
compliance with Directive 2008/98/EC. It indicates measures such as
the effective separation of C&D waste from other wastes, monitoring
of its real composition, processing and separation of C&D waste mate-
Romania is currently facing high labour shortages in the construction rials based on mobility, and reutilisation of resulting fractions in road
sector. This is, moreover, expected to increase in the coming year given infrastructure52.
the introduction of the second national plan for local development
(PNDL II) and the planned investment of RON 30 billion (EUR 6.4 billion) Climate and energy
in rural areas for water, sewerage projects as well as schools or kinder- The broad construction industry accounted for 12.3% of all green-
gartens46. According to the Federation of Owners of Building Compa- house gases emissions in 201453. GHG emissions (carbon monoxide
nies (Federatia Patronatul Societatilor din Constructii – PSC), there and dioxide, methane, nitrous oxides and particulate matter) from
will be a lack of more than 200,000 workers in the construction sector activities in the construction and real estate sub-sectors amounted to
in coming years, inter alia, in order to build projects funded by the EU47. 1,858,181 tonnes and 452,584 tonnes in 2014, respectively. This rep-
resents a 15.6% increase for the construction sub-sector and a 7.2%
Overall, 27% of the national construction workforce decrease for real estate activities.
is unskilled. In total, by 2020, there will be the need
for 50,000 qualified workers for the insulation and
thermal rehabilitation of buildings.
13
5
Innovation in the
construction sector
Innovation performance from 125 in 2010 to 46 in 2014. Likewise, the number of FTE in the real
estate sub-sector was the lowest across all sub-sectors, having fallen
by 75.0% over 2012-2014, from 20 to 5. As with BERD expenditure, the
With an overall innovation and R&D expendi-
professional and technical activities sub-sector reported the largest
ture performance well below the EU average, number of FTE, which increased by 87.1% over 2010-2014, from 233 to
Romania is classified as a Modest Innovator, 436, though significantly lower than the peak of 1,216 in 2012.
being the worst performing country in the EU.
Coherently with the situation depicted by the BERD and the FTE, the
With an overall innovation and R&D expenditure performance well number of construction-related patent applications in the Euro-
below the EU average, Romania is classified as a Modest Innovator pean Patent Office (EPO) and United States Patent and Trademark
the lowest classification according to the European Innovation Score- Office (USPTO) was very low, standing between 0 and 2 each year
board 2017, being the worst performing country in the EU54. Its innova- between 2010 and 2016. Furthermore, no Romanian construction-re-
tion performance has been declining by 14.1% relative to that of the EU lated firms were part of the top 1,000 EU companies by R&D (industrial
in 2010. Its relative strengths lie in an Innovation-friendly environment, sector ICB-3D)58.
Sales impacts, and Human resources, while its relative weaknesses lie
in Innovators, Firm investments, and Finance and support.
Eco-innovation and digitalisation
The National Strategy for Research, Development and Innova-
Business enterprise R&D expenditure (BERD) in the broad tion for 2014-2020 (Strategia na ională de cercetare, dezvoltare
construction sector is generally very low, in line with the country’s weak şi inovare 2014-2020) highlights the importance of the modernisa-
position in innovation (Figure 10). BERD in the construction sub-sector tion of the current research infrastructure and identifies the financial
fell by 85.5% between 2010 and 201455, from EUR 2.9 million to EUR 0.4 support for the construction of new and development of existing infra-
million, the lowest across the construction industry. Real estate activ- structure as a key priority area59. The Research Institute for Construc-
ities had a BERD of EUR 0.95 million in 201256. On the contrary, profes- tion Equipment and Technologies (Institutul de Cercetări pentru
sional and technical activities such as engineering and architecture Echipamente şi Tehnologii în Construcţii – ICECON) takes part in
reported the highest BERD expenditure in 2014, amounting to EUR 5.5 national and European research projects related to materials, innova-
million. However, this number is 18.8% below 2010 levels and signifi- tive construction products and technologies and C&D waste valorisa-
cantly below pre-crisis levels. tion, as well as being involved in the development of technical regu-
lations, standards and good practices in construction, in line with EU
Figure 10: Business enterprise R&D expenditure (BERD) per con-
regulations. Instances of EU projects include ‘Innovative strategies,
struction sub-sector in Romania over 2010-2014 (EUR m)
methods and tools for occupational risks management of manufac-
tured nanomaterials in the construction industry’ and ‘Performance of
bio-based building materials’60.
There is currently a push in Romania for a wider usage of Building

Information Modelling (BIM). In fact, the Ministry of Regional Devel-
opment and Public Administration is developing a construction code
which includes BIM – it is however unclear what the provisions will be.
Moreover, the Ministry of Transportation has started using BIM in the
management of projects, but it is not yet a requirement. Overall, BIM
remains mostly used in private projects and is often pushed by foreign
investors who require its usage to all involved parties of the construc-
Source: Eurostat, 2017. tion projects. In order to raise awareness, the Society of Construction
Law in Romania offers Seminars on BIM. Still, more trainings should
In line with the low BERD expenditure, the total R&D personnel (full- be offered in order to increase the currently low level of usage of BIM
time equivalents – FTE57) in the construction sub-sector fell by 63.2%, in Romania61.
14
6
National & Regional Policy &
Regulatory Framework
Policy schemes Given the high rate of severe housing deprivation, housing affordability
issues (see Access to housing) and the low share of social housing (only
To facilitate access to housing loans and stimulate the construc- 2.3% of the total housing stock), the government is actively supporting
tion sector, the government launched the First Home Programme the construction of new social dwellings, through the National Housing
(Programul Prima Casă) in June 2009. Under the programme, Agency (Agenia Na ională pentru Locuine - ANL). The two main
managed by the National Guarantee Fund for Loans to SMEs, the state programmes of the ANL are “Rental Housing Units for Young People”
issues guarantees of up to 50% of the value of the mortgage offered and “Mortgage-financed Dwellings”. These were launched in 2001 and
by adhering banks62. For newly built dwellings, the borrower must pay are still ongoing. For 2018, the budget coming from state subsidies for
5% of the house price upfront, for dwellings up to EUR 70,000 and any housing construction is, however, expected to be cut by 52% to stand
amount above the EUR 66,500 threshold. For old dwellings, 5% of the at RON 128.8 million (EUR 28 million)69.
price must be paid upfront, for dwellings priced at up to EUR 60,000, The Rental Housing Units for Young People (Programul de
as well the difference between EUR 57,000 and the house price63. The construcii locuine pentru tineri, destinate închirierii) entails the
total budget for 2016 was set at RON 2.94 billion (EUR 630.4 million). For construction of rental dwellings for young people aged 18 to 35, who
2017, the scheme was amended to further stimulate the purchase of cannot afford to buy or rent a property at market price. The units
newer dwellings and therefore have a greater impact on the residential are raised on lots offered by city councils, and can be bought by the
building sector. Thus, guarantees of 50% will apply to the purchase of tenants after minimum one year of lease70.
new dwellings (with a maximum age of 5 years), whereas guarantees
of 40% of the value of the loan are granted for the purchase of proper- According to ANL, in 2015 there were more than
ties older than 5 years. The budget for 2017 was initially set at RON 2.5 130,000 requests from young people, and 87,000
billion (EUR 536.1 million), i.e. 15% lower than 2016, but was recently
apartments were allocated, with the total funding
increased to RON 2.7 billion (EUR 579.0 million) through an unallo-
amounting to RON 87.5 million (EUR 19.3 million).
cated RON 175.5 million (EUR 37.6 million) from the 2016 budget64. The
budget will decrease in 2018 to stand at around RON 2 billion (EUR
428.8 million) and will further decrease in the following years, to reach The same year, 707 new dwellings were started, 1,149 were under
a planned RON 1.5 billion (EUR 321.7 million) budget in 202165 66. Given construction and 733 were delivered71. For the year 2017, ANL plans
the smaller budget in 2018, the eligibility criteria are expected to be to have 2,800 dwellings under construction72.
stricter. Specifically, the scheme is expected to only be available to
Romanian with incomes below RON 5,000 (EUR 1,072.3) per month. The Mortgage-financed Dwellings Programme (Locuin e prin
Overall, since 2009 and until November 2017, 238,305 were granted credit ipotecar) entails the construction of dwellings that can be
worth a total of RON 20.8 billion (4.5 billion)67. purchased through a mortgage, aiming to increase the stock of
privately owned properties. The ANL partially covers the instalments.
Another policy in place in order to foster access to housing is the In 2014, the allocated funds amounted to RON 8.4 million (EUR 1.9
reduced 5% VAT rate applying to dwellings under the value of RON million) and 186 new dwellings were constructed. The eligible dwell-
450,000 (EUR 96,500) and with a maximum usable area of 120 square ings are built on lands assigned by the local authorities to the ANL73.
meters, excluding any housing annexes. Moreover, at the time of
purchase, the dwelling should be fit to live and the land on which the In addition, under the authority of the Ministry of Regional Develop-
house or the individual plot of land of the apartment cannot exceed ment and Public Administration, the National Company for Investment
250 square meters68. (Compania Naţională de Investiţii - CNI) launched the National
Programme for Public or Social Buildings in 2001, currently
ongoing. With a budget of RON 695.75 million (EUR 155.4 million) for
2015, the Programme finances the construction of public or social
buildings, such as cultural institutions, hospitals, schools, sport halls,
etc.74
15
Insurance and liability related regulations Building regulations

The main laws to be followed regarding construction works include80:
According to the Law on The Quality of Constructions (Law Nr. 10/1995, • Law on Building Permits (50/1991; 125/1996; 453/2001)
modified by the Law nr. 177/201575), the construction contractor is • Law on Construction Quality (10/1995)
liable for the timely execution of the works under the agreed condi- • Housing Law (114/1996 and Ordinance 44/1998)
tions, hidden defects and the quality of the building structure and • Government Decision on General Urban Regulation (525/1996)
materials. Hidden defects in the construction are guaranteed by the • Law on Territorial Planning and Urbanism (350/2001)
contractor for ten years, whereas defects affecting the structural core • Law on Protection of the National Cultural Heritage (1998)
of the construction are guaranteed for the entire life of the building76.
However, parties can negotiate to limit or extend liability, unless Other important legislations which regulate construction activities at
otherwise provided by law. Contractually, parties can predetermine a broader general level include the Romanian Constitution and the
the value of the loss and agree to cap contractor liability. Contractor’s New Romanian Civil Code (entered into force in October 2011). Laws
liability can be limited as a result of a negotiation process. There is no and regulations for specific building types (residential, hotels, office
unified practice in relation to the establishment of a cap on liability. If buildings, schools, hospitals, etc.) are also in place81.
agreed, it is usually established as a percentage of the entire value of
the contract (usually a minimum of 10%). Generally, only delay penal- In October 2016, both the Law on Building Permits and the Law on
ties are capped77. Territorial Planning and Urbanism were amended by Law 197/2016.
Various modifications have thus been introduced to streamline the
The use of voluntary insurance is expanding in the construction legislative framework and ensure compliance with the provisions,
sector. Several types are available, including civil liability towards third including the possibility to issue building permits in 15 days from
parties, civil liability of civil engineers and architects, professional civil the submission date in cases of urgency, as opposed to the stan-
liability arising from the design activity and the “All Risks” insurance for dard 30 days. Moreover, fines for breach of the conditions stated in
construction fitting works and for the constructor’s liability. Moreover, the construction permit have been increased substantially, up to a
after the handover of the construction works, Law no. 260/2008 on maximum of RON 100,000 (EUR 22,000) compared to RON 10,000 (EUR
the mandatory insurance of homes against earthquakes, landslides 2,200) prior to the amendment82.
and floods stipulates that all natural and legal persons must insure
their property78.
The Law on Building Permits and Law on Territorial
Planning and Urbanism have further been amended
Insurance costs differ according to the level of complexity of the
project. For a simple project (e.g. an office building), the value of the in December 2016 by the Government Emergency
policy will be 0.14 – 0.16% of the value of the project. For the rehabili- Ordinance No. 100/2016 (“GEO 100”). These changes
tation of a railway, the cost is 0.4-0.5%. If the projects are very complex, include stricter rules in order to initiate an urban
involving digging and other dangerous activities, (e.g. building an zone plan (“Plan Urbanistic Zonal – PUZ) for invest-
underground line) the value may be between 0.8 and 1%79.
ment projects located within city limits.
Moreover, in order to increase transparency, the decision-making

process through which county councillors vote for or against an urban
planning documentation will need to be recorded in written. Overall,
the amendments aim to make the planning procedure for construction
work tougher, increase transparency and reduce corruption83.
16
7
Current Status & National
Strategy to meet Construction
2020 Objectives
TO 1 - Investment conditions and volumes 3.7 billion was invested in dwellings and EUR 13.9 billion was devoted
to non-residential and civil engineering86.
Total investment by the narrow construction sub-sector84 has

Figure 12: Investment in the Estonian construction sector
been on an increasing trend after dropping to a record low of EUR 17.5
between 2010-2016 (2010=100)
billion in 2011, but has not yet reached pre-crisis levels (Figure 11).
Namely, it reached EUR 24.0 billion in 2014, 31.5% higher than in 2010.
Figure 11: Investment by the Romanian narrow construction

sector (EUR m)
Source: AMECO, 2017.
Total inland infrastructure investment as a share of GDP experi-

enced a declining trend since 2010, dropping from 2.7% to 2.1% in 2014.
Investment in rail infrastructure, however, has picked up significantly
by 64.5% between 2010 and 2014 from EUR 168.8 million to reach EUR
277.7 million, but was still 12.2% lower than 2008. Over the 2010-2014
period, the country saw a 12.5% decrease in road infrastructure invest-
ment from EUR 2.9 billion to EUR 2.5 billion.
1.8% Household renovation spending as a share of household disposable

income significantly increased between 2010 and 2011 from 1.2% to
Total investment in the broad construction
4.8%, representing an overall increase in renovation spending from EUR
sector, change 2010-2016
899.5 to EUR 3684.4. Since then, household renovation spending as a
share of household expenditure decreased to reach 2.9% in 2015. This
Total investment in construction85 dropped until 2009, yet, it has is still much higher than EU-28 average which stood at 0.8% in 2015.
been slightly recovering since then increasing by 1.8% between 2010
and 2016 (Figure 12). Investment in non-residential construction and To offset the decline in investments, the Romanian government
civil engineering experienced the hardest hit as a result of the cut in approved a series of measures and legislative amendments in 2015,
government spending due to the crisis, falling by 47.4% over 2008- such as VAT reduction for tourism services from 24% to 9%, which
2009. It has been on the recovery path since then, despite some fluc- is expected to boost investments inhospitality and accommodation
tuations increasing by 13.3% in 2015 compared to 2010, but only by services construction87. Moreover, the standard VAT rate was cut from
0.1% in 2016 compared to 2010. 24% in 2015 to 20% in 2016 and 19% in 2017, being reduced to 5% for
properties with an area of up to 120 square meter88.
Similarly, investment in dwellings experienced a prolonged decline in
the aftermath of the financial crisis, but has started to pick up in 2013
increasing by 25.8% until 2016. In absolute terms, investment in the
construction sector totalled EUR 17.6 billion in 2014, out of which EUR
17
In September 2016, the government approved the revised General However, Romania’s low absorption rate of EU funds limits the effec-
Master Plan for Transport (Master Planul General de Trans- tive economic impact of investments. As of end of October 2016, the
port). It details strategic interventions in transport infrastructure up absorption of EU funds under the 2007-2013 programming period stood
until 2030, with a total value of EUR 43.5 billion89. For road transport at 77.5%, the second lowest in the EU, whereas absorption of EU funds
in particular, the Plan foresees the construction of 1,219 kilometres of for the 2014-2020 period stood at 0.98%, compared to the EU average
11 new highways until 2030, as well as 1,907 kilometres of 19 express- of 2.6%97. Efforts in this respect have been made through an agreement
ways, for a total investment in the sector of about EUR 27.1 billion. with the European Bank for Reconstruction and Development (EBRD),
Specifically, an investment of EUR 13.3 billion is devoted to highways, aiming to support Romania in efficiently using EU structural funds in
EUR 10.8 billion for expressways, EUR 2.5 billion for other roads and priority areas including infrastructure98.
rehabilitations and EUR 0.46 billion for bypasses. Instances of main road
projects include the Sibiu - Pitesti highway, as well as the Ploiesti-Bu-
zau-Bacau-Pascani expressway. An additional EUR 10.2 billion is dedi-
TO 2 – Skills
cated to the railway sector, for 25 projects including the modernisation
and electrification of 1,357 kilometres of railway and the development Participation of upper secondary
of over 1,000 kilometres of high-speed railway lines90. students in VET, 2015
In 2017, Transport Minister Felix Stroe presented

a package of priority infrastructure projects to be
implemented in the future multiannual financial
framework 2018-2027.
The road infrastructure package includes two highways and three Participation of upper secondary students in vocational education
fast roads. This includes the South Road, a 397 km long expressway, and training (VET) stood at 56.3% in 2015, a slight decrease compared
providing a fast road connection between Bucharest, Craiova, Droveta to 2014, but above the EU average of 47.3%. Despite this, the employ-
Turnu-Severin, Caransebes and Lugoj, with an expected cost of EUR ment rate of VET graduates was well below the EU average, standing at
2.5 billion. 63.3% in 2016, compared to the EU average of 75%. This is attributable
to the fact that VET qualifications and curricula are insufficiently aligned
The implementation of this plan, and infrastructural investments in with the needs of the labour market. Moreover, adult participation in
general, will be supported through national and EU funds. lifelong learning was at 1.2% in 2016, the lowest in the EU (10.7%). The
country is taking steps to address the shortfalls of its VET system, with a
With regards to national funds, the government established in 2018 national VET strategy being adopted in 2016 to improve the alignment
a Sovereign Development and Investment Fund holding a mixture of qualifications with the labour market, increasing participation and
of equity in state-owned companies and cash. The Romanian State improving the quality of the training staff. Furthermore, efforts are being
contributed EUR 2 billion. The aim of the fund is to make profit by made to implement a dual VET system to increase the participation of
developing and financing bankable and sustainable infrastructure companies in the training process and further hone the practical skills
projects and in other sectors of the economy92. of students99.
In terms of EU funding, Romania has a total allocation of EUR 30.8 The construction sector used to be an attractive domain for higher
billion from European Structural and Investment Funds (ESIF), education graduates in Romania, particularly prior to the crisis, when
with EUR 6.1 billion specifically for network infrastructures for trans- it was booming. However, in recent years, the comparatively lower
port and energy93. The European Commission adopted the 2014‑2020 entry-level salaries for educated graduates have shifted their prefer-
Large Infrastructure Operational Programme (LIOP) for Romania in July ence towards jobs in alternative sectors, with the ICT industry being
2015, an investment package of almost EUR 9.5 billion from the EU the preferred sector for 73% of them, compared to only 15% for the
Regional Funds to be invested in transport, environment and energy construction sector100.
projects94. In this respect, the European Investment Bank (EIB) plays
a crucial role, providing EUR 1.04 billion worth of new loans in 2016 In 2014, the Federation of Owners of Building Companies started a
alone, of which EUR 760 million dedicated to priority infrastructure programme, co-financed through the European Social Fund, aiming
projects such as large-scale energy infrastructure and environmental to provide guidance, training and qualifications to 962 people in
improvement (EUR 360 million) and water and municipal solid waste construction related jobs101. The project, called “Qualify! Give your-
management (EUR 300 million under the Large Infrastructure Opera- self a chance at a better life!” (Califica-te! Da-ti o sansa la o viata
tional Programme)95. In addition to ESIF, Romania had signed agree- mai buna), seeks to increase the competitiveness and adaptability
ments for EUR 1.2 billion for projects under the Connecting Europe
Facility (CEF) by the end of 201696.
18
of the construction workforce through the promotion of the bene- TO 3 - Resource efficiency / Sustainable
fits of life-long professional training and its access and participation.
construction
The programme entails training courses based on the needs of the
construction market, including insulation, carpentry, floor fitting, black-
Energy efficiency and sustainable construction strate-
smithing, installation of aluminium and plastics fittings, etc.
gies in Romania are governed by Law no. 121/2014 on
Another important private initiative was initiated by Henkel Romania energy efficiency, implementing Directive 2012/27/
Adhesives Division. The Austrian corporation, in a consortium with EU on energy efficiency.
the Romanian-German Foundation from Timisoara and Sibiu, offered
free professional training and latest information on construction
adhesive substances and technologies to 740 construction workers.
The project aimed to increase the skill level of construction workers This law defines the main actions to be taken in order to achieve the
and sellers of construction products, and included training courses 2020 energy saving targets. In addition, Law 159/2013 transposes
on fittings, tile laying and installation of thermo-insulation systems the provisions of Directive 2010/31/EC into national legislation, by
for buildings. The courses were based on a dual vocational education amending Law 372/2005 regarding the energy performance of build-
training method, combining both theoretical and practical knowledge. ings (e.g. nZEB, EPCs, etc.). The Romanian government approved in
Over its 18 months of implementation, 90% of participants obtained January 2016 a further amendment to Law no. 372/2005 on the energy
qualification certificates recognised both at the national level by the performance of buildings. The Law stipulates the obligation of mayors
Ministry of Education, as well as at the European level. The project was in urban areas with more than 5,000 inhabitants to initiate multi-annual
co-financed though the European Social Fund and had a budget of local plans to increase the number of new and existing buildings whose
about EUR 1 million102. energy consumption is nearly zero. Based on local plans, the Ministry
of Regional Development will develop a national plan to increase the
Moreover, the Casa de Meserii a Constructorilor - CMC (The number of new nearly-zero energy buildings (nZEB) and encourage the
Builder Vocational Training School) is responsible for the develop- effective transformation of existing buildings into nZEB.
ment of the human capital base in the construction sector and the
promotion of continuous professional training. To this end, it offers In line with the requirements of the Energy Efficiency Directive (2012/27/
a variety of courses, including stonemasonry, plastering, waterproof EU), the Romanian government approved the National Energy Effi-
insulation, roofing and flooring, but also project management and ciency Action Plan (NEEAP) for 2014-2020, setting out the estimated
‘training of trainers’. In order to ensure that the training offer is in line energy consumption and planned energy efficiency measures to meet
with the requirements of the industry, CMC promotes the collabora- the 2020 energy efficiency targets. The Romanian NEEAP has two
tion between a variety of stakeholders, from national trade associa- objectives, namely the reduction of primary energy consumption to 43
tions to relevant employer associations, which are actively involved million tonnes of oil equivalent (toe) by 2020 and the reduction of final
in defining the needs and actions to be taken for the development energy consumption to 30 million toe105. These goals will be achieved
of the construction human capital. Moreover, CMC also participates through a series of programmes initiated by the Regulatory Authority
in national and international projects to support adult education and for Energy, including the ‘The Thermal Rehabilitation of Blocks of Flats
training, develop energy efficiency-related skills and expand the skilled Programme’, the ‘Heating 2006-2020 - heat and comfort’ and the ‘Energy
workforce in the sector103. efficiency improvement in households and low-income communities’.
These are coordinated by the Ministry of Regional Development, Public
Finally, under Horizon 2020, the EU funds the project Fit-to-nZEB from Administration and European Funds.
2017 to mid-2019 aiming to provide innovative training schemes for
retrofitting dwellings to nZEB-levels. The five goals of this project The Thermal Rehabilitation Programme (Programul de Reabili-
comprise the elaboration of a set of learning outcomes on deep energy tarea termica a blocurilor de locuinte)106, launched in 2009 by the
renovation; the development of new training schemes; the review of Ministry of Regional Development and still ongoing, aims to increase
national educational plans; the training of trainers and the support and energy efficiency of residential buildings built between 1950-1990 in
monitoring of pilot courses104. order to reduce the specific annual consumption of energy for heating
below 100kWh/m2. Under the programme, which had a total budget of
RON 50 million (EUR 11.3 million) for 2015 and RON 25 million (EUR 5.6
million) for 2016, 80% of the costs of rehabilitation works are covered by
state and local budgets, with homeowners (beneficiaries) providing the
remaining amount107. Eligible activities under the programme include
the thermal insulation of the external walls of the block, replacement of
windows and exterior doors of apartments and thermal and hydro-in-
sulation of the roofs and floors. Since its introduction, 1,652 apartment
blocks and about 62,000 flats have been rehabilitated, although this
19
corresponds to only about 2% of the 85,000 eligible blocks. The govern-

ment planned to finance the thermal rehabilitation of about 6,000 flats In 2017, the government approved a state aid
in 2017, almost double the figure for 2016, through a budget of EUR
scheme in order to boost investments in the
8.8 billion108. This is supplemented by EU funds. Indeed, in March 2016,
a call for projects for energy efficient activities in residential build-
construction and/or refurbishment of genera-
ings was launched in the framework of the Operational Programme tion capacities for energy production from less
Regional Development 2014-2020, with a total financial allocation of exploited renewable energy resources.
EUR 447.8 million. The 192 projects received at the close of the call in
November 2016, with a value of EUR 335.6 million, are in the process
of being evaluated109.
TO 4 - Single Market
The programme Heating 2006-2020 - Warmth and comfort
(Programul Termoficare 2006-2020 - caldura si confort), initially
introduced in 2006 and planned until 2015, was extended until 2020, Romania scores relatively well with respect to the
with a total available budget of RON 2.12 billion (EUR 465.8 million)110. metrics of the EU Single Market Scoreboard,
The programme aims to modernise, refurbish and develop centralised
particularly in terms of Infringements, Internal
heat supply of local authorities, as well as improving the quality and
Market Information System, trade integration in
accessibility of the heat supply. Under the scheme, local administra-
tions can benefit from a co-financing from the state of up to 70% of the single market for goods, which is above the
the value of investments111. EU average.
Morever, the project Energy efficiency improvement in house-

holds and low-income communities (Proiectul Imbunatatirea Nevertheless, it performs less well with regard to Transposition of
eficientei energetice in gospodariile si comunitatile cu venituri law and Public Procurement. It scores poorly with respect to the
reduse din Romania) was carried out between 2011 and 2016 with one bidder (i.e. the proportion of contracts awarded with just one
the overall aim of reducing CO2 emissions from buildings by promoting bidder), no calls for bids (i.e. the proportion of procurement proce-
the specialisation of construction professionals (architects, building dures negotiated with a company without a call for tender), aggre-
engineers, energy auditors, etc.) in energy efficiency techniques. The gation (i.e. the proportion of procurement procedures with more
project, which targeted local authorities in six pilot municipalities, than one public buyer) and award criteria (i.e. the proportion of
included both a training and an actual intervention component, and procedures awarded only on the basis of lowest price) indicators116.
resulted in the thermal rehabilitation and installation of central heating
in social housing blocks, through the organisation of courses that Indeed, public contracts in the construction sector are often
trained 826 construction professionals. It benefited from a budget of awarded to companies based on corrupted practices or political
USD 3.05 million (EUR 2.8 million) from the Ministry of Regional Devel- connections, leading to low quality construction works that do not
opment and the United Nations Development Programme (UNDP)112. compare with the amounts of investments flowing in. According
to a study carried out under the EU-funded project ANTICORRP,
The EIB also contributes to the goals under National Energy Efficiency procurement of non-EU funded contracts is more prone to corrup-
Action Plan (NEEAP). For instance, in 2016, the EIB lent EUR 19.5 million, tion, particularly at the county and local level, due to weak admin-
to finance the second phase of the refurbishment programme for istrative capacity, and especially when state-owned companies are
multi-family housing in Bucharest. The first tranche of EUR 22.5 implicated117.
million had already been made available in October 2014. Overall,
around 50% savings in the heating energy consumption is expected A survey by the European Commission conducted in 2014 shows
with a targeted energy savings of 74 GWh when 140 buildings that more than one-third of surveyed citizens believe that “bribery
comprising 9,500 apartments are fully refurbished113. In the last 25 and abuse of office” are widespread among officials issuing building
years, since the EIB Group has operated in Romania, EUR 480 million permits. In 2016, a senior advisor to former Bucharest mayor was
were approved for the improvement of energy efficiency in residential sentenced to four years in jail for committing such a crime. In fact, he
buildings in Bucharest114. had obtained building permits in exchange of a EUR 200,000 bribe.
In 2017, the government approved a state aid scheme in order to To address the issue of corruption, dedicated anti-corruption agen-
boost investments in the construction and/or refurbishment of gener- cies were set up, such as the National Integrity Agency (ANI),
ation capacities for energy production from less exploited renewable aiming to enforce conflict of interest legislation118, and the National
energy resources, such as biomass, biogas and geothermal energy. Anti-corruption Directorate (DNA), a special criminal prosecution
The aid amounts to EUR 100 million and targets enterprises active in agency. The 2001 Freedom of Information Act (FOIA, Law 544/2001)
electricity and thermal energy production and local municipalities. A was implemented, and measures to increase public procurement
non-refundable financing of up to EUR 15 million can be provided for
up to 45% of total eligible expenses115.
20
transparency and simplification were introduced. For instance, in TO 5 - International competitiveness
February 2014, an updated Electronic Public Procurement System
(SEAP) platform was launched, aiming to provide electronic services Romania ranks 68th out of 137 economies in the
to public administration institutions119. In May 2016, the EU direc-
2017-2018 Global Competitiveness Index, falling
tives on procurement were transposed in the national legislation and
entered into force, while all the necessary secondary legislation was
twice consecutively in the last two years127.
adopted by the end of 2016 together with a law imposing system-
atic ex-ante controls on conflicts of interests. In 2015, a new Agency The country’s performance in terms of the internationalisation of its
for Public Procurement (ANAP) was established in order to strengthen SMEs is largely in line with the EU average, with the time and cost of
preventive and detection measures in the area of public procurement the administrative processes required for export-related documentation
and is in charge of conducting the ex-ante checks120. being below the EU average. Namely, the cost of export-related docu-
ment compliance was negligible in 2016, compared to the EU average
of USD 16.4 (EUR 15.3), taking 1 day (against the EU average of 1.4)128.
Moreover, the National Anti-corruption Strategy 2016-2020
(Strategia Națională Anticorupție 2016-2020 – SNA) was adopted The Ministry for Business Environment Commerce and Entrepreneurship
in August 2016 to further combat corruption and ensure integrity provides support for the internationalisation of Romanian companies,
in the public sector121. Nevertheless, through emergency ordinance through its Export Promotion Tools and Programs Directorate.
13/2017, the government approved amendments to the Penal Code Its objectives include the increase of the number of Romanian compa-
in January 2017, seeking to decriminalise government corruption and nies exporting, the promotion of quality Romanian goods and services
abuse of power. Although the amendments were withdrawn through abroad, the diversification of export markets and the improvement of
emergency ordinance 14/2017 following significant protests from the the methods used to identify new international opportunities129.
population, such developments may compromise efforts in the fight
against corruption122. These criticisms – raised amongst other by the In January 2017, the Ministry for Business Environment Commerce and
European Commission – were reiterated in early 2018, in the midst of Entrepreneurship launched the Programme to support the inter-
a new proposed legislation aiming to curb the powers of Romania’s nationalisation of Romanian economic operators (Programul
National Anti-corruption Directorate (DNA). The proposed legislation de susţinere a internaţionalizării operatorilor economici români)
would also make it harder to prosecute corruption. For instance, under for the period 2017-2020. The programme facilitates the promotion of
the new draft law, offenders would not be legally punished for causing products and services of Romanian SMEs in foreign markets, stimulating
financial damage of less than EUR 200,000123. communication and business partnerships and preparing entrepreneurs
to expand to new markets. Under the initiative, up to 500 beneficiaries
An important role regarding the integration of the Romanian construc- a year can obtain state grants of up to RON 50,000 (EUR 11,000). Such
tion market in the EU and the standardisation of construction prod- grants can be used for participation in international fairs, exhibitions
ucts is played by the Institute for Research of Equipment and Technol- and trade missions abroad, development of the company’s visual iden-
ogies in Construction (Institutul de Cercetări pentru Echipamente tity, online presence to facilitate the promotion of goods and services,
și Tehnologii în Construc ii - ICECON). The Institute evaluates and as well as training courses and market research to prepare for interna-
verifies performance in the field of construction products (in confor- tionalisation130. The allocated budget amounts to RON 18 million (EUR
mity with EU Regulation no 305/2011)124. Furthermore, the Ministry of 4 million)131.
Regional Development, Public Administration and European Funds,
acts as the Product Contact Point for Construction, providing Moreover, the Ministry supports Romanian firms by financing the
information on the requirements applicable to construction prod- participation to various international fairs and exhibitions as well
ucts covered by harmonised standards or European technical assess- as economic mission abroad. These include events relevant for construc-
ments125. tion companies, such as the Fensterbau Frontale event in Nuremberg or
the Construma Budapesta event in Budapest, one of the most important
Regarding the implementation of Eurocodes, Romania has made exhibition for the construction sector in Central and Eastern Europe132.
some steps forward. All Eurocode parts are published as National Stan-
dards, with National Annexes being published on all Parts, while 11 In 2010, the Federation of Owners of Building Companies put in place
Eurocode parts are compulsory for structural design. However, there is a strategy to strengthen the international presence of Roma-
no regulatory framework enforcing the use of the Eurocodes in public nian construction companies, particularly in priority areas such as
procurement126. the Middle East, North Africa and Russia133. Business trips are included
in the strategy in order to put Romanian companies in contact with
the international markets of interest, helping them create local part-
nerships and secure contracts. Missions have already been carried out
in Iraq (Kurdistan), Algeria, Moscow and Russia (Kaluga region), and are
supported by the Ministry of Economy.
21
Nevertheless, difficulties have been reported in relation to the polit- project costs and profitability134. Still, Hidroconstructia was granted a
ical instability of some third countries. For instance, Hidroconstructia, USD 23 million (EUR 18.6 billion) guarantee from EximBank in early
one of the largest Romanian construction companies, has been 2018 allowing the Romanian company to run a USD 115.5 million
facing issues in the implementation of its projects in Kurdistan, due contract in Jordan, as a result of winning a tender organised by the
to socio-economic and political instability. The projects, with a total Arabian Potassium Company. Under the contract, Hidroconstructia will
value of over USD 200 million (EUR 181 million), were halted tempo- conduct various construction works, including waterproofing, metallic,
rarily or significantly slowed down, with negative consequences on mechanical and electrical works135.
22
8
Outlook
dential construction is expected to grow at an average rate of 4.9%

until 2020137. Moreover, renovation and thermal rehabilitation of
The Romanian construction sector has experi-
residential buildings also displays an important market potential, as
enced a considerable decline since 2008, in terms
around two-thirds of the dwellings are older than 35 years and lack effi-
of workforce, number of companies and produc- cient thermal insulation. This market alone is estimated by the Ministry
tion. the UK and EU. of Regional Development to be worth EUR 1.5 billion yearly, if backed
by proper government support and EU funding138.
The Romanian construction sector has experienced a considerable The non-residential sector experienced a promising growth in 2016,
decline since 2008, in terms of workforce, number of companies and with 956,000 m2 of retail, logistic and office spaces being completed
production. However, the outlook for 2018 and following years is indic- and delivered, an 88% increase compared to 2015. This rapid pace of
ative of a gradual recovery across the industry, supported by a buoyant development continued during 2017 and is expected to continue in
economic context. GDP is set to grow by 3.7% in 2018 to RON 682.8 2018. It is predicted that demand will rise for new office constructions
billion (EUR 146.5 billion). The improved macroeconomic situation as current and new players in the market will plan to increase their
will therefore be accompanied by positive growth in the construction occupied space by 20-50%. As for the retail real estate segment, no new
sector, forecast at an annual rate of 2.0% in 2018, 3.8% in 2019 and significant projects were announced in Bucharest for the coming years,
5.4% in 2020. This is expected to slow down in subsequent years, at an yet, given the high level of growth it is expected that investments will
average annual rate of 2.5% over 2021-2026136. continue to grow. Such investments will focus on less populated cities
and in the expansion of modern retail space139.
GDP growth forecast The civil engineering segment is also set to be a main driver of growth
2016-2018 for the construction sector, due to the important planned investments
in public infrastructure and substantial contributions from EU funds. In
particular, transport infrastructure is expected be the leading segment,
Moreover, the number of workers in the broad construction sector is spurred by extensive investments under the General Transport Master
set to pick up, increasing by 11.6% in 2018 compared to 2016, reaching Plan, with railway infrastructure alone being forecast to grow at an
679,538 people. Similarly, the number of companies in the sector is annual average of 5.5% until 2020140. However, hurdles remain in
projected to increase by 12.5% between 2016 and 2018, reaching the investment and management of large infrastructure projects in
101,210 firms. In the same vein, the value added of the broad construc- Romania. For instance, 2017 saw the construction of 24km highways
tion sector is expected to continue its strong recovery and increase by nationwide, significantly below the government target. Given low
11.3 over the same period to reach EUR 10.5 billion. These develop- EU funds absorption and limited state budget, it is expected that the
ments will be accompanied by an 11.1% increase in turnover in 2018 construction of at least 156km of roads in 2018, as targeted by the
relative to 2016, reaching EUR 34.0 billion. government, will not be achieved141.
In this respect, greater and improved absorption of available EU funds

Number of enterprises in will play a fundamental role in increasing the quality and quantity of
the broad construction public spending on infrastructure and removing a major barrier to
sector forecast 2016-2018 the growth prospects of the sector. In addition, acceleration of public
procurement and project management reforms and greater transpar-
ency are needed to realise the full potential of infrastructure invest-
ments142.
The housebuilding segment will be one of the main drivers of the
recovery of the Romanian construction sector, as supported by a
combination of governmental housing schemes, increasing household
spending power and a more attractive mortgage market. Indeed, resi-
23
References
1 Please note that this 2016 is a nowcast – please refer to the methodology notes for further details.
2 Please note that this 2016 is a nowcast – please refer to the methodology notes for further details
3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added
in the GDP, since the GDP also includes taxes and excludes subsidies.
4 Eurostat, Unemployment by sex and age - annual average. http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_a&lang=en
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13 No data available prior to 2013.
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19 Ibidem.
20 National Institute of Statistics, Autorizațiile de construire eliberate pentru clădiri. January 2018. http://www.insse.ro/cms/ro/content/autoriza%C8%9Biile-de-
construire-eliberate-pentru-cl%C4%83diri-36
21 Ibidem.
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default/files/com_presa/com_pdf/constr_loc_tr4r_15.pdf
24 The housing cost overburden rate is the percentage of the population living in households where the total housing costs represent more than 40 % of disposable
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lvho07a&lang=en
26 The overcrowding rate is defined as the percentage of the population living in an overcrowded household.
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28 Eurostat, Severe housing deprivation rate is defined as the percentage of population living in the dwelling which is considered as overcrowded, while also
exhibiting at least one of the housing deprivation measures. Housing deprivation is a measure of poor amenities and is calculated by referring to those households
with a leaking roof, no bath/shower and no indoor toilet, or a dwelling considered too dark.
29 Eurostat, Severe housing deprivation rate by age, sex and poverty status - EU-SILC survey. http://ec.europa.eu/eurostat/product?code=ilc_
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32 Financial times, mountains and politics thwart Romania’s infrastructure plans. September 2017. https://www.ft.com/content/9d312dce-632f-11e7-8814-0ac7eb84e5f1
24
33 Oficiul Național al Registrului Comerțului, Societăți intrate în insolvență. https://www.onrc.ro/index.php/en/statistics?id=252&lg=en
34 Ibidem.
35 Capital, Avântul imobiliar va fi retezat din faşă dacă dispare Prima Casă. December 2015. http://www.capital.ro/avantul-imobiliar-va-fi-retezat-din-fasa-daca-dispare-prima-casa.html
36 Emerging Europe, Bad Payers Still Causing Problems for Romanian Firms, October 2017, https://emerging-europe.com/in-brief/bad-payers-still-causing-problems-romanian-firms/.
37 Banca Nationala a Romaniei, Financial Stability Report 2015. http://www.bnr.ro/Regular-publications-2504.aspx
38 Emerging Europe, Bad Payers Still Causing Problems for Romanian Firms, October 2017, https://emerging-europe.com/in-brief/bad-payers-still-causing-problems-
romanian-firms/.
39 Intrum Justitia, European Payment report 2017. https://www.intrum.com/globalassets/countries/portugal/publicacoes/european_payment_report_2017.pdf
40 Eurler Hermes, Insolvency and Payment. 2018. http://www.eulerhermes.com/economic-research/themes/insolvency-payment-risk/Pages/default.aspx
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permits http://www.doingbusiness.org/data/exploreeconomies/sweden/#dealing-with-construction-permits
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47 Economica, Criză de angajaţi în construcţii: e nevoie de 600.000 de muncitori, iar constructorii sunt dispuşi să crească salariile, dacă statul îi ajută. September
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48 Digi24, Criză de muncitori calificaţi în construcţii. September 2015. http://www.digi24.ro/Stiri/Digi24/Actualitate/Stiri/Criza+de+muncitori+calificati+in+constructii
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55 No data for 2012 and 2013.
56 Data for other years unavailable.
57 A full-time equivalent (FTE) is a unit to measure employed persons in a way that makes them comparable, although they may work a different number of hours per
week. The unit is obtained by comparing an employee’s average number of hours worked to the average number of hours of a full-time worker. A full-time person
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60 ICECON, Programe Europene. http://www.icecon.ro/#
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67 Observator, Prima Casa 2018 conditii locuinta, February 2018. https://observator.tv/economic/prima-casa-2018-conditii-locuinta-241392.html
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25
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70 ANL, Locuinte pentru tineri-descrierea programului, 2015, http://www.anl.ro/en/locuinte-pentru-tineri/
71 ANL, Raport de activitate al Agenției Naționale pentru Locuințe pentru anul 2015. https://www.anl.ro/userfiles/files/statice/50/RaportactivitateANL2015.doc
72 EVZ, Buget 2017. Ministerul Dezvoltării va finaliza 300 de LOCUINŢE, din 2.800 aflate în execuţie din anii trecuţi. January 2017. http://www.evz.ro/buget-2017-
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73 MDRAP, Programul de constructii prin credit ipotecar. http://www.mdrap.ro/lucrari-publice/-1763/-5440
74 MDRAP, Programul National de Constructii de interes public sau social derulat prin intermediul Companiei Naţionale de Investiţii C.N.I. - S.A. http://www.mdrap.
ro/lucrari-publice/-7952
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domeniul-constructiilor.htm
76 DLA Piper, Limitation period. http://www.dlapiperrealworld.com/law/index.html?t=construction&s=liability&q=limitation-period&c=RO
77 Practical Law, A Thomson Reuters Legal Solution, Construction and projects in Romania: overview. http://uk.practicallaw.com/1-502-1619?source=relatedcontent#a224357
78 DLA Piper, Insurances. http://www.dlapiperrealworld.com/law/index.html?t=construction&s=forms-of-contract-procurement-methods&q=insurances&c=RO
79 1asig.ro, Cat costa asigurarile de constructii in Romania? http://www.1asig.ro/VIDEO-Cat-costa-asigurarile-de-constructii-in-Romania-articol-3,100-51408.htm
80 Musat&Asociatii, Property and Construction. http://www.musat.ro/wp-content/uploads/2015/04/28-Property-and-Construction.pdf
81 Flanders Investment and Trade, The Construction Sector in Romania http://www.flandersinvestmentandtrade.com/export/sites/trade/files/market_
studies/249130909111522/249130909111522_1.pdf
82 Maravela Asociatii, AMENDMENTS TO ROMANIAN LEGISLATION ON BUILDING PERMITS, URBAN PLANNING AND REAL ESTATE REGISTERS. November 2016. http://
www.bizlawyer.ro/pdf/1478506585.pdf
83 Noerr, Romania: New important amendments to Romanian construction and urban planning laws. January 2017. https://www.noerr.com/en/newsroom/News/
romania-new-important-amendments-to-romanian-construction-and-urban-planning-laws.aspx
84 No data available for Real Estate activities.
85 This includes total investment (i.e. gross fixed capital formation) in dwellings and non-residential construction and civil engineering by investors in the general
economy (e.g. industry, financial and non-financial services, households, agricultural sector, etc.).
86 The indicator gross fixed capital formation in non-residential and civil engineering refers to the Eurostat indicator «Other buildings and structures».
87 Ziarul Financiar, Reducerea TVA la alimente şi în turism va stimula şi piaţa construcţiilor. May 2015. http://www.zf.ro/companii/reducerea-tva-la-alimente-si-in-
turism-va-stimula-si-piata-constructiilor-14207432
88 Patronatul Comerciantilor si Servisantilor de Case de Marcat din Romania, TVA 19% incepand cu 1 ianuarie 2017. December 2016. http://www.
patronatcasedemarcat.ro/comunicate/tva-19-incepamnd-cu-1-ianuarie-2017/
89 Romania TV, Master Planul General de Transport al României, aprobat de Guvern. Cum se va circula până în anul 2030. September 2016. http://www.romaniatv.
net/master-planul-general-de-transport-al-romaniei-aprobat-de-guvern-cum-se-va-circula-pana-in-anul-2030_314425.html
90 Ministry of Transports, Master Planul General de Transport al României. September 2016. http://image.stirileprotv.ro/media/document/61833354.pdf
91 Ziua De Vest, Drumul Sudului, inclus in Master Planul General de Transport al Romaniei. March 2018. http://www.ziuadevest.ro/drumul-sudului-inclus-master-
planul-general-de-transport-al-romaniei/
92 Lexology, Proposed legislation on setting up the Romanian Sovereign Fund for Development and Investments. November 2017. https://www.lexology.com/library/
detail.aspx?g=10c0500b-543d-472c-8519-0c2e6140f128
93 European Commission, Country Data for: Romania. https://cohesiondata.ec.europa.eu/countries/RO
94 European Commission, EU will invest nearly €9.5 billion in Romania for transport, environment and energy. July 2015. https://ec.europa.eu/commission/2014-2019/
cretu/announcements/eu-will-invest-nearly-eu95-billion-romania-transport-environment-and-energy_en
95 European Investment Bank, EIB group financing reached EUR 1.1bn in Romania in 2016. March 2017. http://www.eib.europa.eu/infocentre/press/releases/
all/2017/2017-043-eib-group-financing-reached-eur-1-1bn-in-romania-in-2016.htm
96 European Commission, Country Report Romania 2017. February 2017. https://ec.europa.eu/info/file/96697/download_en?token=AK_mD_OA
97 Business Review, Romania’s absorption of EU funds, below EU average on 2014-2020 period. November 2016. http://www.business-review.eu/news/romanias-
absorption-of-eu-funds-below-eu-average-on-2014-2020-period-125558
98 European Bank for Reconstruction and Development (EBRD), EBRD to help Romania access EU funds, advance structural reforms. February 2016. http://www.ebrd.
com/cs/Satellite?c=Content&cid=1395248848968&d=&pagename=EBRD%2FContent%2FContentLayout
99 European Commission, Education and Training Monitor 2016 Romania. September 2016. https://ec.europa.eu/education/sites/education/files/monitor2016-
ro_en.pdf
100 Business Review, IT and auto companies top “Most Loved Employers” study in Romania. February 2016. http://www.business-review.eu/featured/it-and-auto-
companies-top-most-loved-employers-study-in-romania-96813
101 Revista Constructiilor, FPSC: Proiecte cofinantate FSE dedicate formarii profesionale a angajatilor de pe santier. August 2014. http://www.revistaconstructiilor.eu/
index.php/2014/08/01/fpsc-proiecte-cofinantate-fse-dedicate-formarii-profesionale-a-angajatilor-de-pe-santier/#.VqouUPkrKHs
102 Revista Constructiilor, 01.10.2015. http://www.revistaconstructiilor.eu/index.php/2015/10/01/henkel-academia-profesionistilor-in-finisaje-un-proiect-henkel-
romania/
103 Casa de Meserii a Constructorilor, Cursuri de formare. https://www.cmc.org.ro/index.php/cursuri-207
26
104 European Commission, CORDIS, Innovative training schemes for retrofitting to nZEB-levels. 2018. https://cordis.europa.eu/project/rcn/210594_en.html
105 ANRE, PNAEE - Planul naţional de acţiune în domeniul eficienţei energetice - MO nr. 169 bis/11.03.2015, https://ec.europa.eu/energy/sites/ener/files/documents/article7_ro_romania.pdf
106 Please refer to the dedicated Policy Fact Sheet for further details.
107 Capital, Şapte ani de reabilitare termică pentru 3% dintre blocurile comuniste. June 2016. http://www.capital.ro/sapte-ani-de-reabilitare-termica-pentru-3-din-
blocurile-comuniste.html
108 Bucuresti News, Planuri marete pentru 2017 la reabilitarea termica a blocurilor de locuinte. March 2017. https://bucuresti-news.ro/planuri-marete-pentru-2017-la-
reabilitarea-termica-a-blocurilor-de-locuinte/
109 Guvernul vrea să reabiliteze un număr dublu de apartamente faţă de 2016. Cum va reuşi acest lucru. March 2017. http://www.money.ro/guvernul-vrea-sa-reabiliteze-
un-numar-dublu-de-apartamente-fata-de-2016-cum-va-reusi-acest-lucru/
110 Ministerul Dezvoltarii Regionale si Administratiei Publice, Guvernul a prelungit pana in 2020 programul de termoficare. July 2015. http://www.mdrap.ro/comunicare/
presa/comunicate/programul-de-termoficare-caldura-si-confort
111 Gazeta de Dimineata, Fonduri guvernamentale pentru rețelele de termoficare. October 2016. http://gazetadedimineata.ro/breaking-news/fonduri-guvernamentale-
pentru-retelele-de-termoficare/
112 Ministerul Dezvoltarii Regionale si Administratiei Publice, Proiectul ‘Imbunatatirea eficientei energetice in gospodariile si comunitatile cu venituri reduse din
Romania’. May 2016. http://www.mdrap.ro/lucrari-publice/-3144/-7907
113 EIB, EIB continues to support investments increasing the energy efficiency of residential buildings in Buccharest’s Sector 4. March 2016. http://www.eib.org/
infocentre/press/releases/all/2016/2016-077-eib-continues-to-support-investments-increasing-the-energy-efficiency-of-residential-buildings-in-bucharests-sector-4.
htm
114 EIB, EUR 13 bn for economic and financial support – the EIB Group celebrates 25 years of operations in Romania. October 2017. http://www.eib.org/infocentre/press/
releases/all/2017/2017-278-eur-13bn-for-economic-and-financial-support-the-eib-group-celebrates-25-years-of-operations-in-romania.htm
115 Lexology, Romania : EUR 100 Million State Aid for the Development of Niche Renewable Sources. May 2017. https://www.lexology.com/library/detail.
aspx?g=ec8eb750-e02b-4a96-93ba-70196319ea3e
116 European Commission, EU Single Market Scoreboard. Romania. http://ec.europa.eu/internal_market/scoreboard/performance_by_member_state/romania/index_
en.htm
117 ANTICORRP, Romanian public procurement in the construction sector. Corruption risks and particularistic links. March 2015. http://anticorrp.eu/wp-content/
uploads/2015/06/D8.1.5-Romania.pdf
118 ANI, Brochure. May 2014. https://www.integritate.eu/Home/Brosura-A.N.I.aspx
119 E-licitatie, https://www.e-licitatie.ro/Public/Common/Content.aspx?f=PublicHomePage
120 European Commission, European Semester Country Report Romania. February 2017. https://ec.europa.eu/info/sites/info/files/2017-european-semester-country-
report-romania-en.pdf
121 Ministerul Justitiei, Adoptarea Strategiei Naționale Anticorupție (SNA) 2016-2020. August 2016. http://www.just.ro/adoptarea-strategiei-nationale-anticoruptie-
sna-2016-2020/
122 Digi24, OUG 13, definitiv îngropată. Președintele a promulgat legile care o abrogă. February 2017. http://www.digi24.ro/stiri/actualitate/politica/oug-13-definitiv-
ingropata-presedintele-a-promulgat-legile-care-o-abroga-675939
123 EU warns Romania against planned judicial reforms. January 2018. http://www.dw.com/en/eu-warns-romania-against-planned-judicial-reforms/a-42294820
124 ICECON SA, Istoric. http://www.icecon.ro/
125 Ministerul Dezvoltarii Regionale si Administratiei Publice, Regulamentul (UE) 305/2011 - Punct de informare. http://www.mdrap.ro/constructii/-4218
126 JRC Report EUR 27511 EN, State of implementation of the Eurocodes in the European Union. 2015. http://eurocodes.jrc.ec.europa.eu/showpublication.php?id=537
TheGlobalCompetitivenessReport2016-2017_FINAL.pdf
128 European Commission, 2016 SBA Fact Sheet Romania. November 2016. http://ec.europa.eu/DocsRoom/documents/21188/attachments/29/translations/en/renditions/
native
129 Ministry for Business Environment Commerce and Entrepreneurship, Export Promotion Tools and Programs Directorate. 2018. http://www.imm.gov.ro/directia-
instrumente-si-programe-promovare-export
130 Guvernul Romaniei, Program de promovare a firmelor românești pe piețele externe. January 2017. http://gov.ro/ro/guvernul/sedinte-guvern/program-de-promovare-
a-firmelor-romane-ti-pe-pietele-externe
131 Alba24, Finanţări pentru IMM în 2017. LISTA programelor naţionale de sprijin pentru mediul de afaceri. January 2017. http://alba24.ro/finantari-pentru-imm-in-2017-
lista-programelor-nationale-de-sprijin-pentru-mediul-de-afaceri-544540.html
132 Ministry for Business Environment Commerce and Entrepreneurship, Export Promotion Tools and Programs Directorate. 2018. http://www.imm.gov.ro/directia-
instrumente-si-programe-promovare-export
133 Sursa Zilei, CRISTIAN ERBAȘU: PRIORITĂȚILE EXTERNE ALE INDUSTRIEI DE CONSTRUCȚII SUNT ORIENTUL MIJLOCIU, NORDUL AFRICII ȘI RUSIA. July 2013. http://
www.sursazilei.ro/cristian-erba%C8%99u-priorit%C4%83%C8%9Bile-externe-ale-industriei-de-construc%C8%9Bii-sunt-orientul-mijlociu-nordul-africii-%C8%99i-rusia/
134 Ziarul Financiar, Tensiunile din Irak au dat peste cap contracte de 200 de milioane de dolari derulate de colosul Hidroconstrucţia în această ţară. „Există consecinţe
negative pe profit“. January 2015. http://www.zf.ro/constructii-imobiliare/tensiunile-din-irak-au-dat-peste-cap-contracte-de-200-de-milioane-de-dolari-derulate-de-
colosul-hidroconstructia-in-aceasta-tara-exista-consecinte-negative-pe-profit-13751552
27
135 Energy Observer, Eximbank: 23 million dollars collateral for a Hidroconstructia Jordan Deal. January 2018. https://www.energyobserver.com/en/post/7546
136 BMI Research, Romania Infrastructure Report. March 2017. http://goto.bmiresearch.com/dc/70Q3En4OM4KgGisFW_A_66PxOKBjFLGnNzBr3uaNz66-ewrZCENGRZfhDzZ3sSYH
bgXzxsPt13fPYACVj8NK_4FIVdgH1XmqQtSeVcNJctKGlBp2leWVcuCGYOQzesUeZpJuBAxHye3wFWax6NgWOQf0UbWfAYXCvAGu1rNXKAcWasT-lwZuwbYLGPKpka6vw483JcZ-
75sr4h7LptmmJw==/rx0R0Y1A0UhpH5TAR00e0H0
138 Property Forum, 10 predictions for the Romanian market in 2018. January 2018. https://www.property-forum.eu/news/10-predictions-for-the-romanian-
market-in-2018/1813
139 Business Review, Study: 2016 – best year for Romanian real estate market since 2008, with 1 million sqm delivered. December 2016. http://www.business-
review.eu/news/study-2016-best-year-for-romanian-real-estate-market-since-2008-with-1-million-sqm-delivered-127488
141 Property Forum, 10 predictions for the Romanian market in 2018. January 2018. https://www.property-forum.eu/news/10-predictions-for-the-romanian-
market-in-2018/1813
142 IMF Country Report No. 15/80, Romania- selected issues. March 2015. https://www.imf.org/external/pubs/ft/scr/2015/cr1580.pdf
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European Construction

Given the poor energy efficiency condition of the building stock,

2010 2014 2016

The total population of Romania amounted to 19.8 million people in

Total population of Romania

Turnover of the broad

Source: Eurostat, 2017.

Source: Eurostat, 2017.

The number of self-employed workers in the construction sub-sector

Number of people employed in the broad

The consumer confidence indicator has been negative since 2000,

Source: Eurostat, 2017.

Domestic sales Export of construction-related

Romania EU-28 Romania EU-28

Product Value Share in Product Product Value Share in Product

Portland cement, Other Particle boards Ceramic tiles

Prefabricated buildings Doors, Builders’ joinery and Other structures

Other structures Prefabricated

Source: PRODCOM, 2017. Source: PRODCOM, 2017.

In general, due to their lower ability to cope with adverse economic

manufacturing sector are finance constrained16 and about 12% in

Figure 9: House price index in Romania over 2010-2016

The poor quality of Romanian infrastructure

Severe housing deprivation

payment, amounting to 31%. Conversely, the manufacturing sector in

permits and licenses

requirement, since it defines the relevant technicalities (utilities, acces-

In 2014, 422 million tonnes of construction and demolition (C&D)

There is currently a push in Romania for a wider usage of Building

Insurance and liability related regulations Building regulations

Moreover, in order to increase transparency, the decision-making

Total investment by the narrow construction sub-sector84 has

Figure 11: Investment by the Romanian narrow construction

Source: AMECO, 2017.

Total inland infrastructure investment as a share of GDP experi-

1.8% Household renovation spending as a share of household disposable

In 2017, Transport Minister Felix Stroe presented

corresponds to only about 2% of the 85,000 eligible blocks. The govern-

Morever, the project Energy efficiency improvement in house-

dential construction is expected to grow at an average rate of 4.9%

In this respect, greater and improved absorption of available EU funds

4 Eurostat, Unemployment by sex and age - annual average. http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_a&lang=en

5 Euractiv, Romania gets largest EU bailout to date. March 2009. https://www.euractiv.com/section/euro-finance/news/romania-gets-largest-eu-bailout-to-date/

7 World Economic Forum, The Global Competitiveness Report 2017-2018. http://www3.weforum.org/docs/GCR2017-2018/05FullReport/

13 No data available prior to 2013.

14 Please note that 2016 data is estimated based on data up to November.

borrowing costs would be too high.

17 EIB, Investment Survey – France. 2017. http://www.eib.org/attachments/efs/eibis_2017_france_en.pdf

27 Eurostat, Overcrowding rate. http://ec.europa.eu/eurostat/product?code=ilc_lvho05a&language=en&mode=view

30 World Economic Forum, The Global Competitiveness Report 2016-2017. http://www3.weforum.org/docs/GCR2016-2017/05FullReport/

33 Oficiul Național al Registrului Comerțului, Societăți intrate în insolvență. https://www.onrc.ro/index.php/en/statistics?id=252&lg=en

37 Banca Nationala a Romaniei, Financial Stability Report 2015. http://www.bnr.ro/Regular-publications-2504.aspx

39 Intrum Justitia, European Payment report 2017. https://www.intrum.com/globalassets/countries/portugal/publicacoes/european_payment_report_2017.pdf

40 Eurler Hermes, Insolvency and Payment. 2018. http://www.eulerhermes.com/economic-research/themes/insolvency-payment-risk/Pages/default.aspx

41 Intrum Justitia, European Payment report 2017. https://www.intrum.com/globalassets/countries/portugal/publicacoes/european_payment_report_2017.pdf

42 CRIBIS D&B, Payment Study 2017. https://www.dnb.ru/media/entry/54/Payment_Study_2017_Light.pdf

44 Building regulations in Romania. http://romanian-lawyers.rolegal.com/2013/11/building-regulations-Romania.html

48 Digi24, Criză de muncitori calificaţi în construcţii. September 2015. http://www.digi24.ro/Stiri/Digi24/Actualitate/Stiri/Criza+de+muncitori+calificati+in+constructii