MASTERBUILD – General Contractor & Developer reports a 74 million RON turnover for the fiscal year 2022 and forecasts a 25 percent increase this year, given the contracts signed in the first 4 months of this year.
Although the construction market is facing major, fast-impacting issues such as shortages of building materials and constant legislation changes, MASTERBUILD has a pipeline of new construction works of almost 200,000 sqm, representing contracts already signed in the first months of the year or under negotiation.
58 percent of the demand last year came from the retail sector (retail parks, shopping centres, retail stores formats), 15 percent from the logistics segment (logistics parks and industrial or manufacturing facilities) and 27 percent from the public works segment. This year, the trend continues, with a significant volume of demand for new construction recorded mainly in retail and manufacturing (factories and production facilities of international and local operators). The public segment also continues to invest this year, with projects financed through PNRR and other public sources, continuing to generate demand in construction.
Among the legislative changes that have put pressure on the construction activity in the last year is the elimination of tax facilities for construction employers, together with the increase of the minimum gross wage in the country from 3,000 to 4,000 lei (OUG 16/2022, OUG 168/2022). As construction contracts are carried out within fixed budgets, some of the legislative changes have intervened during the contract period, transferring new fiscal pressures and associated costs to construction companies. With the main aim of increasing the level of tax collection, the recent measures did not take into account the reality of the construction market, adding more pressure on a sector already marked by inflationary pressures and bottlenecks in the building materials market, according to MASTERBUILD specialists.
“The construction market is still going through an unstable period, but investors’ appetite remains high in Romania, compared to Western European markets (countries such as Germany or Austria) which are currently blocked from the investment point of view. EC economic forecasts indicate a 2.5 percent growth in 2023 and 3 percent in 2024 and construction investments are certain to continue in the context of deglobalization and trends such as nearshoring and the need for Romania to strengthen its position in the region. Although international investors remain cautious, Romania is an important investment stake in the region and construction companies who focus on development, investment, and added value will make the difference on the market in the coming period,” says Ștefan Ferdinand Vayna, CEO of MASTERBUILD – General Contractor & Developer.
By 2023, the company’s objective is to maintain the share of retail, manufacturing, logistics, and military or government infrastructure projects in its total business volume and to achieve its growth target of 25 percent by the end of the year.