Thursday, 3 September 2026
Romania’s construction sector continued to expand strongly in the first part of 2026, but the growing importance of government-backed projects is creating a more uneven outlook for the industry. While infrastructure and residential works are maintaining high levels of activity, privately financed commercial development remains more restrained as borrowing costs and economic uncertainty weigh on investment decisions.
Construction volumes increased by approximately 12% during the first five months of 2026 compared with the same period last year, according to Colliers’ H1 real estate market analysis. The figures measure the physical volume of work carried out rather than the monetary value of projects, meaning the increase cannot simply be attributed to construction-cost inflation.
Residential construction recorded the strongest increase, rising by around 16%, while infrastructure activity expanded by approximately 14%. Non-residential construction grew at a slower rate of about 6%, reflecting a more cautious approach among private investors and the continuing difficulty of financing new developments.
Infrastructure, including road, railway and hospital projects, now represents more than half of construction activity, according to Colliers. This has helped maintain the market at levels almost twice those recorded before the pandemic, but it has also increased the industry’s exposure to government spending and the availability of European financing.
“This year’s pace of activity shows that the construction market remains very active, but its reliance on public investment is becoming increasingly significant. More than half of activity comes from state-funded projects, and the key question for the months ahead is whether these investments can continue at the same pace,” said Alexandru Atanasiu, Partner and Head of Construction Services at Colliers.
Romania’s infrastructure programme has expanded considerably in recent years. The country had approximately 1,400 kilometres of high-speed roads at the beginning of 2026, compared with around 900 kilometres before the pandemic. More than 1,000 kilometres are currently at different stages of construction, while another approximately 300 kilometres are being planned.
Maintaining that pipeline will be one of the main challenges during the remainder of the year. Some transport schemes relying on European funding face financing uncertainty, while estimates cited by Colliers indicate that road projects alone could require an additional €10–15 billion from the state budget or alternative programmes if expected European resources are unavailable.
Romania’s 2026 budget includes more than RON 160 billion for public investment, with European financing playing an important role. Any material slowdown in the deployment of those funds could therefore affect not only contractors but also suppliers, transport companies, logistics operators and other businesses connected with construction.
At the same time, contractors are facing renewed pressure on costs. Prices for some construction materials have started rising again, while labour expenses remain elevated. The introduction of costs associated with the EU’s Carbon Border Adjustment Mechanism is also expected to affect certain imported materials, including steel and aluminium.
Higher costs are particularly problematic when combined with delayed payments. Contractors working on large projects can be required to finance labour, materials and subcontractors well before receiving payment themselves, increasing working-capital requirements. High interest rates make bridging these periods more expensive.
“The construction market is still performing very well, but uncertainty is increasing. Contractors have projects and activity, but costs are rising, financing remains expensive, and some public investments are becoming more difficult to predict,” Atanasiu said.
He added that delayed payments can quickly affect contractors’ ability to finance several developments simultaneously. Although margins accumulated during stronger years provide some protection, that capacity is not unlimited if costs continue increasing or public projects begin to slow.
Employment in construction remains close to record levels at around 460,000 people. Labour expenses have also increased following the removal of tax advantages previously available to the sector from January 2025. Romanian construction wages nevertheless remain below those in several other Central and Eastern European markets, providing local contractors with some remaining cost competitiveness.
The industry’s growing economic importance makes the risks more significant. Construction represented approximately 8.6% of Romanian GDP in 2025, according to figures cited by Colliers. Lending to construction companies has also increased, exceeding RON 54 billion by the end of the first quarter of 2026, around 16% higher than a year earlier and almost double the level recorded in 2019.
For commercial property developers, the market presents a noticeably different picture from the infrastructure boom. The comparatively modest increase in non-residential construction suggests that expensive financing and uncertainty continue to constrain privately funded schemes. Developers are consequently taking a longer view on new projects rather than responding immediately to the strength visible in headline construction statistics.
Romania’s wider economic outlook is also contributing to that caution. Colliers has reduced its 2026 economic forecast substantially since the beginning of the year and now expects GDP to contract by approximately 0.7%. Inflation remains elevated and meaningful reductions in financing costs are not expected in the immediate term, making debt-dependent developments more difficult to justify.
The construction sector therefore enters the second half of 2026 from an unusually strong starting position but with an increasingly concentrated source of demand. Continued public and European investment could keep activity close to current highs, while any substantial interruption to infrastructure spending would expose how dependent the market has become on state-backed projects.
For developers and investors, this environment is also changing priorities. Controlling procurement, construction costs, financing requirements and delivery risks is becoming increasingly important as projects are assessed over longer investment horizons. Romania may still have one of Europe’s most active construction markets, but the durability of that activity will increasingly depend on whether its infrastructure pipeline can continue moving from funding commitments to construction sites.
