Polish construction market forecast to stabilise

30 October 2013

Although contractors are still having a tough time in Poland, the situation in the country’s construction market appears to be improving slightly, according to research company PMR.

The past 18 months have seen numerous companies operating in Poland’s construction sector declare bankruptcy or be forced into restructuring as construction output declined and procurement issues took their toll.

PMR said their latest data showed stabilisation was on the cards, with an outlook for a more robust recovery in 2015.

The company surveyed 200 of the largest Polish construction companies and found that 19% reported a loss in 2012, 12% broke even and 69% reported a net profit.

In 2012, the cost-to-revenue ratio in the construction industry stood at 100.2%, which meant that costs borne by construction companies slightly exceeded revenues they generated.

For 2013, 20% of those surveyed said they expected to break even, 15% expected a net loss and 65% expected to report net profit. The cost-to-revenue ratio for the first half of 2013 stood at 99.7%.

PMR said hope for Poland’s construction industry was bolstered by the fact that many entrepreneurs were capable of obtaining loans for their investment projects due to low interest rates.

“This also improves the structure of demand for building services and provides contractors with an opportunity to build up their backlogs,” PMR said.

Upcoming EU-funded projects are also expected to have a positive bearing on the outlook for the construction industry, but these effects are likely to be felt by the market only in 2015.

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