The Romanian building materials market will grow about 0.5% in quantity terms this year, while in terms of value, the development of the sector will depend very much on inflation, according to the Romanian Association of Producers of Construction Materials (APMCR). "Last year, inflation in this segment was about 5%, and at the end of 2012 the building materials market was valued at 3 billion Euros. For the current year, we estimate a similar value" said Claudiu Georgescu, President of APMCR. In the context of maintaining the forecasts regarding economic difficulties which will be encountered by local companies, the suppliers of building materials show a little more optimistic compared to the attitude displayed last year, and resume investments in production capacity. However, the budget allocated by the Government for investment activity in the sector will be further characterized by uncertainty. There are opinions that the application of a reduced VAT rate for construction sector does not distort competition within the single EU market, despite existing speculations in this regard. Officials of the European Council of Producers of Materials for Construction (CEPMC) assert that because the activity in the sector is based on local services, a distortion of competition is unlikely. "We hold, therefore, reduced rates of VAT in the residential sector, which has immediately resulted in stop falling demand and production, and increased the rate of the employment in the field. There is no risk of loss of national income obtained from VAT, as a result of the increased number of contracts made at a reduced rate. By decreasing these rates to some local service providers, activities are only moved from the informal economy to the formal one. This is particularly true in intensive industries in terms of workload, which construction falls in", said an official of CEPMC. For further information and a detailed analysis of the current Agenda Constructiilor issue, click here!