But for the time being, Romania’s construction sector is moving ahead, despite the pandemic. In truth, construction usually grinds to a halt during the cold weather months anyway. Contractors lost little time this year, however, since the winter was mild enough to leave the sites open. _x000D_
_x000D_
Vitalis Consulting is coordinating work on a number of projects in Bucharest and other major cities. Managing partner Florin Popa says his company has implemented all the necessary safety measures on their sites and has as yet not received any notifications from public authorities to halt work. “The projects are still going ahead according to plan,” he said._x000D_
_x000D_
Marius Lulea, vice-president of the Technical College of Site Managers believes the construction sector could end up escaping major delays since three months of down time is built into projects each year to account for the cold. “There is a misconception about the extent of private real estate investment,” says Lulea. “In fact, in countries around the world, the largest investor is the state. This time, after the current crisis is over, we will see huge investments in the European Union, as red tape will be cut for some projects.”_x000D_
_x000D_
He added that there tends to be substantial pressure to keep such long-term financial investments on track. “It’s not in anybody’s interest to stop them. We might see a momentary restriction of activity, but it will return quickly after this crisis.”_x000D_
_x000D_
However, the General Secretary of Urbanis (the Association of Romanian Real Estate Developers) warns that most investors will stop or suspend any new projects, investments or acquisitions. He predicts they’ll focus on protecting their existing investments and keeping their business alive. “It’s absolutely necessary for construction activity to continue as there are ongoing contracts and real delivery schedules which must be met, even if they are six months or one year from now,”Cosmin told CIJ Europe._x000D_
_x000D_
Fear of the pandemic has sparked scenes resembling the Biblical exodus as more than 200,000 Romanians who’d been working abroad dashed for home over the past couple of weeks. Some working in Italy or Spain have seen their jobs vanish, while others feared the infection rates in Western Europe and hoped to find better conditions back home. _x000D_
_x000D_
Mariu Lulea sees this as an opportunity for Romania, which has lost a great deal of its active labor pool in recent years: “The Romanians are returning home. They see now that the states where they used to work do not provide them the necessary support, as they prioritize their own citizens. So, they come home because they no longer feel safe over there. After the crisis, most of them will stay here. That’s a good thing since the sector has an acute shortage of staff.”_x000D_
_x000D_
However, given the new social distancing situation which limits contact between people, Florin Popa admits there are “fewer construction workers on site and fewer visitors as well. But we do not face a major lack of personnel due to panic and fear of contamination.”However, he expects an increase in labor costs or a lack of construction workers in the coming period because many construction companies in Romania have foreign employees with fixed-term contracts._x000D_
_x000D_
In fact, the issue of foreign workers (mostly from Asia) could prove problematic at some point given the new travel restrictions implemented by the EU borders. “No measures have been taken yet regarding the foreign workers, because up until now the sites are continuing their construction activity,” says Ivan Bogdan Cosmin from Urbanis. He says most developers are counting on a decrease in labor costs. This will encourage them to move ahead with their projects “as it is better to build when costs could be lower”._x000D_
For the moment, there’s no lack of construction materials on the market, but some worry that this may be coming. Like worried consumers, many companies are creating stocks while they still can in case future shipments are delayed or cancelled. “As a large amount of raw materials are imported from China or other countries, there is a chance we may face trouble in this area. We may also expect an increase in construction material costs in the coming period,”notes Florin Popa. _x000D_
_x000D_
But Marius Lulea disagrees. Romania produces around 80 percent of the construction materials it needs, he points out, including cement, bricks, wood and metallic boards, which offers developers a “huge advantage”. “At this time there is no activity interruption. Materials are being delivered at a normal pace. We could even say there are stocks available and suppliers are willing to support local development.”_x000D_
_x000D_
The coronavirus pandemic is having a dramatic impact on the global economy, and could well influence events on the construction market. The Romanian real estate market has been on a positive trend for a while and Florin Popa believes “we can be optimistic, at least for now.”But real estate is highly volatile, easily influenced by news and rumors, so any acquisition has a deeply subjective component. That’s why Ivan Bogdan Cosmin expects the pace of sales and investments to decrease in the coming period. _x000D_
_x000D_
But he points out that any projects started over the past two years must be completed as there is pressure from both clients, who can’t afford to lose their financing, and from developers and investors. “Panic could be more deadly than the virus itself, so in the coming period there should be efforts to maintain a trustworthy and positive climate for as long as possible,” says Cosmin.
