Construction works volume index grew by 9.1% y/y in Q2 and by 6.8% y/y in H1/2012, according to official statistics. The works for engineering projects surged by 17.1% y/y in Q2 and 18.1% y/y in H1, remaining the sector’s growth driver. Nonetheless, the construction works volume dropped by 4.6% y/y in July, losing ground immediately after the June 10 local elections had driven up the index in Q2. The construction sector’s dynamics and its contribution to the GDP growth are likely to witness abrupt weakening in H2, as the government cut down significantly public funding for infrastructure under the autumn budget adjustment and construction works on large projects, such as motorways and Bucharest underground sections had to be slowed down.
Figure 1 Construction works index in 2007-2012 (2005=100)
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