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September 28, 2022

IBC Focus report: Almost three quarters of construction companies postpone projects due to rising material prices

Almost three-quarters of the largest construction companies in Romania (73.6%) attribute the delays in the execution of the works to the increase in the prices of construction materials, shows a report published by IBC Focus (marketing company specialized on the construction market) on Monday.

According to IBC Focus data, 72.7% of the respondents are of the opinion that the postponement of projects represents another problem generated by the high prices of construction materials.

Also, four out of ten construction companies mention the extended terms of delivery of materials among the main problems they are currently facing, in a context in which developers have also noticed a decrease in demand from clients or even a reduction in the size of projects (52%).

“However, a positive effect of the price increase can be seen in the behavior of companies and the search for innovative solutions, such as design optimization and design quality in order to save materials, reduce losses and waste, plus the introduction of advanced technologies,” notes the cited source.

In this context, only 10% of construction companies mentioned the stopping or freezing of works, while 2% fired employees to respond to the market situation.

The IBC Focus study shows a polarization of turnover in the accounts of the hundred largest construction companies. Thus, 27% of the total turnover registered by construction companies in Romania is concentrated in the portfolio of the first hundred companies, a share that decreased compared to the previous year (32.1%). At the same time, the profits made by these companies reached the highest level since 1989.

At the same time, more than half of construction companies (51.8%) say that they will register an increase in income compared to last year, and a quarter (26.4%) expect that business will decrease.

According to IBC Focus, the largest construction companies focus on public projects, such as infrastructure works, social constructions and public utilities. Against this background, 74% of construction contractors chose the infrastructure sector as one of the Top 3 areas from which they expect increases in terms of workload in the next 12 months.

In the private sector, the most attractive field in the coming period is represented by industrial constructions, followed by retail and residential investments. Conversely, the lowest selection rate is the office sector and commercial buildings.

IBC Focus conducted the 13th edition of the Top 100 General Contractors in constructions.

According to the data of the National Institute of Statistics, published on Monday, the total volume of construction works, in unadjusted terms, increased by 4.7% January through July this year compared to the similar period last year, and by 2.7% as workday and seasonally adjusted series.

By structural elements, increases were recorded in current maintenance and repair works (+12.3%), new construction works (+3%) and capital repair works (+0.1%).

By construction objects, there were increases recorded in non-residential buildings (+16.3%) and residential buildings (+5.8%).

According to INS, engineering constructions decreased by 3%.


Photo: www.pixabay.com

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