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ANALYSIS: Development prospects on medium term for the pipes sector

The companies which operate on the local sector of piping, fittings and pumping systems for water supply works, drainage and water treatment, reported a slightly downward trend in the last year, the main reason being the lower investment activity. There were also vendors who registered some increases, but these positive results were mainly generated by exports. The negative situation in the field is confirmed by the information communicated by the National Statistics Institute (INS), which confirmed a decrease of 1.9% of construction engineering works (as adjusted series) compared to the level reported in 2012. The medium term prospects are positive, given the new funding period 2014-2020, but it is most likely 2014 will be a preparatory period for investments. Concerning the business development opportunities for this year, the managers in the industry have contradictory opinions, which increases uncertainty in the field. The pipes segment is divided into two sectors, namely the markets of metal pipes and plastic pipes (estimated at a value about 100 million per year). The expected trends in both segments are similar, and strictly depend on the evolution of public investment. A complementary segment is the one including pumps and pumping systems, also rated at around 100 million euro annually. According to the opinion of the most important officials in the industry, the financial and economic crisis has had a positive effect on the analyzed market, given the fact that only the really powerful companies managed to remain professional and profitable. On the medium and long term, however, the experts expect significant growth in the area, but this will be subject to political stability and government efforts to improve the performance of the investment programs, especially those funded by European Union. Following the Summit on the Multiannual Financial Framework (MFF) for 2014-2020, which took place in early February 2013 in Brussels, for Romania were allocated cohesion funds of 21.825 billion euro, an amount that will be indexed to inflation which corresponds to the period of implementation.

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