Economy’s ”services-ification” and rise of IT. 8 aspects of GDP structure change over the past decade. Industry – the big loser

23 ianuarie, 2026

A country’s development model is often „handled” by decision-makers through various incentives and facilities. This is the case of the IT industry, which, after the introduction of tax facilities in Romania in 2001, recorded major growth and became one of the engines of the economy and an „instrument” for expanding the middle class.

On the other hand, much of the economic growth in the last 10 years has been relatively chaotic, a fact revealed by data on the GDP structure from the NIS and by the way in which the different branches of the economy have changed their shares in the formation of the gross domestic product.

1. Industry, the big loser

Economists point out that a country’s emphasis on industry leaves the economy vulnerable to deterioration in external demand. Germany and China are considered countries that base their prosperity on industrial production, while the economic literature of the last decades of globalization and the shift of production to low-cost Asian countries emphasizes the transition to a market economy based on services and consumption, a condition for advancement to the status of „developed economy”.

In Romania, the share of industry in economic formation (GDP) decreased by approximately 7 percentage points (pp) from 2015 to 2024, from 24.1pp in 2015 to 17.3pp in 2024.

This loss was offset by the services and consumption components (wholesale and retail trade + transport + hospitality), which took over the role of the main driver of growth, as the economy transitioned from a centralized economy to a market economy with less state influence.
However, it should be noted that an industrialized economy has multiple „veiny” ramifications, not only in the added value of the economy, but especially in innovation (innovation takes place either at the factory or nearby), in the education system (more engineers), and in local business ecosystems and the transportation sector.

Note: GDP data is semi-final for 2024.

In 1989, industry had a share of 49.1% of GDP, a percentage with which Romania ranked 6th in the world, after Iraq (82%), Botswana (56.3%), Kuwait (52.1%), Bulgaria (51.6%) and Oman (49.2%). Compared with European countries, in the same year, in Yugoslavia the industry had a share of 45.6%, in Poland the share was 42.8%, in Hungary and Czechoslovakia, 31%, and in the USSR, 30%.

Regarding the loss of industry’s share in the last 10 years, this came not only in the context of the „services-ification” of the economy, but also amid the slow de-industrialization of Germany – Romania’s major trading partner, our country being an integral part of the European production chain – and stagnation/decline in domestic industrial production.

Moreover, over the past 5 years, there has been a downward trend in the average number of employees per company, with the exception of the construction sector. Most relevantly, an industrial company had an average of 19 employees last year compared to 31 five years ago.

2. Lack of investment in agriculture, land fragmentation and weather dependence

Besides the industry branch, agriculture is the sector that has lost the most of its share in GDP formation, as GDP has increased.

The share of agriculture varied most strongly depending on the weather, with extremes in weather being 13.3% in 1979, and 20.2% in 1971, and 16% in 1989, respectively. At the regional level, in 1989, the shares of agriculture were as follows:

16.8% in the USSR,
13.5% in Hungary,
13% in Poland,
11.3% in Yugoslavia.

In the last 10 years (2015 vs. 2024), agriculture lost another 1.4pp in share – from 4.2% in 2015 to 2.8% in 2024. After the Revolution, one of the highest shares in Romania was 6.5% in 2007.

According to economists, the productivity of Romanian agriculture remains at a low level due to the lack of investment in equipment and irrigation, lack of professionalism and land fragmentation, which burdens agricultural potential – countries with agricultural areas twice as small have double agricultural production, such is the case of Great Britain or the Netherlands.

In addition, Romania has a largely seasonal and weather-dependent production, with large fluctuations in production, which consists mainly of cereals that are exported.

Romania has a disproportionately low vegetable production, compared to land and climate potential

A picture of Romania’s production of vegetables and fruits shows that our country is wasting its potential and, despite the proportion of agricultural land in total area, we are far behind comparable states in terms of production and consumption potential:

Romania’s agricultural area is 12.714 million hectares, which represents 8.1% of the total agricultural area of the European Union. Of this area, 8.407 million are arable land, or 8.7% of the total arable land in the EU, which places our country in 5th place among member countries.
Despite this, Romanian production of fresh fruit and vegetables represented only 1.9% of the total EU production last year. For some vegetables, our production is incredibly low: for example, Nordic countries beat us in cucumber production.

3. IT, transition champion

At a narrow level, the IT&C sector is one of the most consistent sectors, with large business growth in almost all years analyzed (except 2024), including 2020 – an element that adds resilience and robustness to the economy (see NIS graph – IT sector in dark blue).

IT gained 1.9-2.0 percentage points in its share of GDP between 2015 and 2024, reaching 6.9% at the end of last year. IT not only has structural growth and a robust cumulative contribution to the advance of GDP and the middle class, but also (unused) potential in the field of digitalization given the quality of local experts.

The development of IT and the entry of large foreign companies also supported the construction market, as large office buildings were erected in urban centers.

4. Construction, economy’s foundation

During the communist period, the best year for construction was 1977, the year of the earthquake, when the sector’s share in GDP was 9.6%, a significant increase from 1976, when the share was only 6.3%. After the Revolution, the best year for construction was 2008, when the sector’s share in GDP had reached 12% before the crisis.

Compared to 2015, when its share in GDP formation was 5.9%, construction gained 2 percentage points – reaching 7.9% of GDP in 2024, thanks to public investments supported by European funds and residential investments, which accelerated strongly during the period of low interest rates immediately after the pandemic.

5. Trade, king and development indicator, turned into weakness

During the same period, trade, hospitality and the transport sector gained 3.5 percent in contribution to GDP: from 17.0% in 2015 to 20.5% in 2024. The growth is natural given the increase in living standards, but also the diversification and sophistication of consumer demand, which involves more frequent outings to restaurants, vacations or other types of so-called discretionary spending (for personal needs).

The increase in consumption, however, came against the backdrop of a record injection of borrowed money (large budget deficits in recent years), led to a major deterioration in the trade and current account balance: this means that a large part of consumer demand is satisfied from imports, meaning that local money creates jobs and welfare in other countries.

This is also the case in tourism: Romanian tourists’ spending on holidays abroad and business tourism stood at EUR 9.6 billion in 2024, a record value, with a contribution of over 10% to the total current account deficit.

6. Services

The development of the service offer is also natural in the conditions of the post-Revolution structural gap, and the trend of increasing the share of services is natural. For instance, in the last 40 years, services have increased their share from 25% to 70% in Japan, and from 30% to over 70% in Germany. In these countries, however, industry has remained at shares closer to 25% than to 15%, as is the case in Romania.

To illustrate, in 2024, the number of companies whose main activity was market services reached 53.3% of the total, with those active in trade in second place (26.1%). Service providers also had the most pronounced increase in share, exceeding half of the total number of companies in 2021 (50.1%). However, the rise is continuous looking back. A significant decrease in the number of companies was recorded in the case of trade activity, over a period of 5 years the decrease being 3.3 percentage points.

Market services activities are the ones that have increased the most in terms of the average number of employees. Subsequently, in 2024, an average of 39.5% of Romanian employees worked in services, while in 2020, their number was 36.3%, 3.2 percentage points less.

Romania is still lagging behind in terms of services, with a share of total services in the GDP structure of 62.5% in 2024, according to the spring 2025 forecast of the National Commission for Strategy and Prognosis (NCSP).

By comparison, the share of total services in the GDP structure was 49.4% in 2005, according to historical data from the NCSP.

Note: Total services include several activities, including financial and insurance brokerage, real estate transactions, professional, scientific and technical activities, administrative service activities and support service activities, the public and defense sectors, plus the health/education, culture sectors, etc.

Comparison with 5 years ago: industry still loses

Meanwhile, in 2024, in terms of turnover, companies with a primary trade activity (39.7%) ranked first, as expected, with construction companies accounting for only 8.9% of the total turnover. However, as public and private investments in real estate increased, the share of construction increased significantly compared to 5 years ago, when it only accounted for 6.7% of total business in the economy.

The biggest drop is recorded by the industry, which fell from 33.1% in 2019 to 29.7% of all turnover in the economy in 2024. In the case of services, turnover in 2024 was 21.7%, 1.5 pp higher than in 2019.

Big changes concerning who brings added value to the economy

In terms of who produces added value in the Romanian economy, the biggest changes compared to 5 years ago are recorded in favor of construction and services.

Changes in gross added value within each sector analyzed over a 5-year period: