Cost mechanism in the construction sector. Bankruptcy versus profitability of the construction company as a function of the costs generated

Abstract This study examines cost processes in the Romanian construction industry, focusing on their implications for profitability and bankruptcy risks among small construction firms. Through a case study of a microenterprise operating between 2005 and 2022, the research demonstrates that effective cost management strategies contribute significantly to profitability. However, the findings also highlight the substantial challenges posed by legislative and economic instability. The analysis emphasizes the critical importance of stable and supportive fiscal policies for the sustainability of small and medium-sized enterprises (SMEs) in the construction sector. By analyzing financial data and industry statistics, the study identifies a clear correlation between legislative changes and the financial performance of SMEs, reinforcing the need for a consistent regulatory framework to foster sustainable growth and employment opportunities within the industry.