This report covers the market developments in Q2/2014, as well as the data available as of October 2014.

The performance of the construction materials market in Q2/2014 paralleled the poor performance of the construction segments over the quarter, yet it varied across the market segments. The cement market was the most affected by the lack of major infrastructure projects. On the other hand, the increased dynamics in residential and commercial constructions reflected in improved activity on the brick and finishings segments. The output of building materials continued to increase y/y in Q2, accelerating from the 7.8% y/y rise in the previous quarter.

The DIY retail market maintained dynamic in Q2. While in the first quarter the market faced consolidation moves (the sale of BauMax and Praktiker chains, and the exit of OBI), in the second quarter players moved on with expansion. Local retailer Dedeman opened four stores this year. Praktiker and Tekzen also announced openings after several years of expansion freeze.

The prospects of the building materials market remain cautious and rather on the pessimistic side at least until the end of the year, closely linked to the same performance expected for the construction sector. In 2013, the construction sector was negatively affected by scarce financing, adverse taxation regime and slow absorption of EU funds. However, each of these factors are expected to be partly settled in the coming quarters, though a notable recovery should be visible in constructions only beginning with 2015.

Key points:
• Construction materials output accelerates growth in Q2/2014
• Investment fund ADM Capital launches offer to buy minority stake in Ceramica Iasi
• Cemacon to resume ceramic bloc production at upgraded line in Zalau in Q1/2015
• Ruuki to close steel roof tile factory in Bolintin Deal
• Dedeman opens stores in Bucharest, Targu Jiu, aims to expand chain to 50 stores by end-2015
• Hornbach reports increase in customer number, mulls further expansion