Construction growth for Poland

05 November 2010

The Polish construction industry will see increased growth in the coming years, following the challenging years of 2009 and 2010, according to research company PMR.

Construction Sector in Poland, H2 2010 - Comparative regional analysis and development forecasts for 2010 to 2013, the 20th edition of a report prepared by PMR, presents a positive view of Poland's construction market despite certain difficulties reported by construction companies.

Civil engineering construction will continue to be the main driver of growth in the Polish construction industry, said PMR. However, given the exponential growth in 2009 and, consequently, a higher base of comparison, civil engineering construction will register slightly weaker growth in the coming years, according to the report.

Given the fact that a vast majority of civil engineering projects are public projects, some of them may be delayed. PMR said a serious risk was also posed by the simultaneous execution of so many large road projects, as some of these projects could face obstacles.

Compared to the forecasts of six months ago, development prospects for non-residential construction have improved slightly, mainly as a result of the stabilisation in commercial construction and expectations of continued increases in the public utility construction segment - growth of about 40% in 2010, according to PMR.

It added that improvement would also be powered by the recovery in the financial sector, more dynamic growth of the Polish economy and a stronger inflow of foreign direct investments into Poland.

Despite a major slowdown in the housing market, long-term growth prospects for the sector remained positive, it said, adding that the crisis in the Polish housing market had proved decisively less severe than commonly expected and its impact had been much less acute when compared with most EU countries.

"Information published by the major developers in the recent months suggests that the supply of developer-built homes will partly recover already in 2010," said Bartlomiej Sosna, senior construction analyst at PMR and the report's author.

"In 2009, the developer construction segment caught up with the individual construction in terms of housing completions. Due to the major slowdown in new investment projects by developers in 2008 and 2009, we expect that individual construction will retain the status of the biggest residential construction segment.

"However, in the long term, developers' contribution will rise more strongly as, in addition to multi-dwelling buildings, developers are more and more active in building smaller residential buildings, including single-family houses and residences, so wealthier Poles will decide to use developers' services instead of building the house using their own means."

PMR said that the development forecasts presented in the report were also confirmed by the opinions of the largest construction companies in the most promising segments of the construction market looking at the next two years. Traditionally, road construction is expected to be the most attractive sector in the next two years with 81% of respondents sharing this view. Power construction - including facilities for the power, gas and fuel industries - was ranked second in terms of attractiveness. Railway construction was considered to be the most attractive construction segment by one in five respondents, marking a strong increase from a year ago - it was 9% in September 2009. Residential construction was recognised to be a prospective sector by a roughly similar percentage as railway construction, up from 12% a year earlier.

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