The constructions market fell by around 17% in 2009, to 11.9 billion euros, according to data from the Romanian Builders and Contractors Association (ARACO), confirmed by the National Statistics Institute (INS), which announced that the gross volume of construction works was down by 16.7% in the first 11 months of 2009, compared with the similar period of the previous year.

In addition, there was a change in the share of investments conducted in the private sector. Whereas 2008 saw 70% of works carried out in the private sector and 30% in the public sector, in 2009, the state accounted for 55-60% of the value of works.

"There was a 16-17% decline of the construction market, which followed a 26% increase in the previous year. We expected a very strong decline, but even so, it was double as much as the GDP decline," says Laurentiu Plosceanu, chairman of ARACO.

The first 11 months of 2009 saw 19,500 companies become insolvent, most of which were small and medium-sized with construction work as their core business, with many even going bankrupt. Under the circumstances, according to market estimates, one in five construction companies became insolvent in 2009.

"In addition, 70,000 employees were removed from the industry in 2009. It is a major economic and social price paid by the construction sector because of the crisis, and, unfortunately, we cannot talk about a slowdown of this trend. Short-term forecasts are not very good, considering that there are many unknowns as to financing for these projects and to organising tenders for new projects."

Plosceanu says foreign investors that withdrew from the real estate and the constructions market last year will not return very soon, unless the state provides a more attractive economic framework.

Romania is already competing over foreign capital with other countries in the region, such