Chartbook

Construction sector
November 2010

Note: The report is based on the most recent available statistical information (September 2010)

Expected dynamics: Short-term (2-3 quarters)

Long-term (one year and more) 

Short assessment: • Situation in the construction sector is still fragile.

• Construction output remains on a downward trend. All segments of the construction sector
have a negative performance.
• Building permits remain also on a downward trend. This suggests no major improvement
in building activity in the coming period.
• New insolvencies remain high.

Monthly changes (% mom) based on trends Annual changes (% yoy) - trends

Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10
Total construction output -1.5 -1.3 -1.8 -2.8 -2.6 -1.9 -14.9 -15.4 -16.4 -16.7 -16.5
rezidential 0.8 -0.9 -3.5 -9.0 -10.5 -11.2 -32.4 -32.1 -34.4 -36.6 -39.3
non-rezidential -1.2 -0.1 0.0 0.2 2.1 3.1 -19.3 -16.4 -14.0 -11.0 -8.0
civil engineering -1.3 -0.9 -1.1 -1.8 -2.1 -1.7 -3.5 -4.2 -6.0 -8.5 -10.5
new construction works 0.4 0.7 -0.1 -2.4 -2.1 -1.3 -23.0 -21.2 -20.5 -19.3 -17.2

No. of employees 0.4 -0.3 -0.1 -0.1 -0.4 -0.7 -15.8 -14.4 -13.0 -11.8 -11.1

Total building permits -0.1 -1.1 -1.9 -2.9 -3.4 -3.9 -12.2 -11.4 -13.6 -16.8 -20.4
rezidential 0.9 -0.6 -1.6 -2.5 -2.9 -3.6 -8.5 -8.5 -10.9 -13.9 -17.0
other non-residencial 0.6 0.4 -1.0 -3.1 -5.0 -5.7 -17.6 -13.8 -13.9 -17.7 -22.1
offices -24.7 -25.3 -22.1 -9.9 8.0 12.4 -56.9 -62.0 -66.0 -65.1 -64.1

Confidence index* -0.2 -0.2 -0.1 0.4 0.8 0.9 0.8

* change in level

Note: There is some volatility in the data at monthly frequency. In order to have a better view on the main tendency of the indicators, this volatility
was removed, retaining in the analysis only the main tendency. Monthly and annual growth rates were computed based on these tendencies.
The effective level and the adjusted level (trend, tendency) is presented in the following pictures for many of the indicators.

Historical data might be slightly adjusted each month.

Sources of data used in the report: National Institute of Statistics, Eurostat, Raiffeisen RESEARCH

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Total construction output (2005=100) Construction output by sectors (2005=100) Construction output by sectors (2005=100)
250 250 250

200 200
200

150 150
150

100 100
100

50 50
50
Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10
Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10
Residential New construction works
Effective level Trend Nonresidential Capital repairs
Civil engineering Current repairs

Number of employees (2005=100) Nominal wages and salaries (% yoy) Confidence index in construction
140 60 10

50
0
40
120 -10
30

20 -20

10
100 -30
0
-40
-10

80 -20 -50

Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10

Trend Trend Effective level Trend

Residential building permits (2005=100) Non-residential building permits (2005=100) Inputs’ cost - new residential buildings (% yoy)
250
300 30

200 25
250
20
150
15
200

100 10

150 5
50
0
100
0 -5

Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10
50

Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Total cost (% yoy)

Effective level Trend
Non-residential: offices (trend) Labour costs (% yoy)
Non-residential: others (trend) Prices for materials (% yoy)

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Cement production (% yoy) Number of finished dwellings, by quarters

20000
10

0
15000
-10

-20
10000
-30

-40 5000

-50
0
-60
05Q2 06Q2 07Q2 08Q2 09Q2 10Q2
May-09

May-10
Aug-09

Nov-09

Feb-10

Aug-10

Dwellings finished in urban area

Dwellings finished in rural area
Total finished dwellings
Cement production (% yoy)

Report on insolvencies for companies activating in the construction sector

New insolvencies in construction sector Structure of insolvencies across construction sector

0.40
100%
0.35

0.30 80%
0.25
60%
0.20

0.15
40%
0.10

0.05 20%

0.00
0%
Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10
Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10
Turnover of new insolvent companies (% of total turnover in construction) (s.a.)

Number of new insolvent companies (% of total active companies) (s.a.) Building Civil engineering Special works

Largest companies from construction sector for which insolvency procedure was opened

Largest insolvencies: July 2006-Sep 2010 Largest insolvencies: July 2010-Sep 2010
Turnover (RON mln, as
Last financial reporting per last financial Last financial reporting Turnover (RON mln, as per last
Company period reporting period) Company period financial reporting period)
EUROMOBILLE '30-Jun-2009' 273 IMPACT DEVELOPER '31-Dec-2009' 54.2
T.M.U.C.B. '30-Jun-2009' 243 N.M. CONSTRUCT '31-Dec-2009' 51.0
BIBI BROTHERS CONSTRUCT '31-Dec-2009' 154 TOMIS DEVELOPMENT '31-Dec-2009' 34.8
KEY PLAN CONSTRUCT '31-Dec-2009' 144 CONFORT '31-Dec-2009' 24.7
MEGA SPEDITION METAL '31-Dec-2008' 87 EUROSTRADE '31-Dec-2009' 24.3
TOTAL CONSTRUCT INVEST '30-Jun-2009' 84 EUROLOGISTICĂ '31-Dec-2009' 23.0
CONCEFA '31-Dec-2009' 81 SOUSA PEDRO '30-Jun-2009' 16.1
SUMMA EUROPE CONTRACTING '31-Dec-2009' 80 PRECON '31-Dec-2009' 15.6
OZER CONSTRUCTION '30-Jun-2009' 79 SAB GENERAL CONSTRUCT '31-Dec-2009' 15.0
MIVAN KIER '31-Dec-2009' 78 DISBEV SERV '31-Dec-2009' 14.0
ERG TERMROM '31-Dec-2009' 60 CO.GEI EUROPE '31-Dec-2009' 9.9
MOCHLOS SA GRECIA '31-Dec-2009' 55 ACONOVA '31-Dec-2009' 9.1
IMPACT DEVELOPER & CONTRACTOR '31-Dec-2009' 54 ALFA CLIMA IMPIANTI '30-Jun-2009' 9.1
N.M. CONSTRUCT '31-Dec-2009' 51 DEKOSPHERE '31-Dec-2009' 8.9
B & A CONSTRUCTII '31-Dec-2009' 50 VALGAB TRUST '30-Jun-2009' 8.4

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Raiffeisen BANK Romania - Analysts

Ionut Dumitru, Ph.D - Chief Economist

Nicolae Covrig, Ph.D
Romulus Mircea, CFA
Gabriel Bobeica
- Phone: +40-21-306-1269
- Financial Analyst
- Phone: +40-21-306-1262
- Financial Analyst
- Phone: +40-21-306-1672
- Financial Analyst
- Phone: +40-21-306-1369

This report was completed on 23 November 2010.

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