Abstract
We continue to forecast a fall in construction sector output in Romania during
2009. In fact, we have
revised our forecast slightly this quarter, to a
real contraction of 4.3% in construction output for the year
as a whole,
compared with the previous forecast for a 3.2% annual fall. Aside from
concerns about the
impact of the recession on the availability of public
funds for infrastructure spending, this revision also
reflects the effect
of the recession on private business demand (including demand for office
and
warehouse space) and residential property demand.
For 2010, we
continue to expect near zero real construction sector growth (0.2% for the
year as a whole),
as the recession – and the strain on public
finances – will take time to ease, according to our core
scenario.
This quarter we update our analysis of regional construction
giant STRABAG SE and Transelectrica,
the Romanian transmission and system
operator. STRABAG, the parent company of STRABAG SE, is
being weighed down
by acquisitions made at the top of the market last year. Transelectrica is in
a
relatively good position, having continued to generate a profit in Q109,
despite Romania entering a sharp
recession during the quarter.
E.ON
Romania announced that it will slash investments in electricity and gas
networks in Romania by
26% to RON245mn (US$81.7mn) in 2009 compared with
the earlier planned amount of RON331mn
(US$110.4mn), reports NewsIn (June
2009). The company has taken this decision because of the ongoing
global
financial crisis. The company' s earlier plans for 2009 included replacement of
about 40% of its
pipeline web, adding to the 850kms of pipeline that were
repaired during the past four years, and to the
1,450kms that were
replaced earlier.
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