Bulgaria’s bumpy ride

The construction industry in Bulgaria is forecast for ups and downs in the coming years, with limited medium-term growth in the non-residential and civil engineering sectors, but steep declines in residential construction.

According to research company Buildecon, output in the civil engineering sector – which has the largest share in the country’s construction output – is expected to contract this year, but to rebound in 2013 and 2014. Indeed, the sector could grow as much as 4% by 2014, Buildecon said.

The non-residential sector could grow 3% by 2013, Buildecon added, but after this a severe decline is expected following the completion of commercial building projects, particularly shopping malls.

A weak performance is also expected to continue in the office sector, due to the high vacancy rate of the existing office stock, while the industrial and storage sector is forecast to see positive developments between now and 2014.

In contrast the country’s residential sector will have depleted by more than 20% by the end of 2013, Buildecon said.

“Both investors and the government are disinclined to develop high-volume projects. Because of the high jobless rate, low purchasing power, strong migration and the lack of foreign investors, we do not forecast a prompt recovery in the subsector,” it said.