The "exceptionally severe winter" of 2009/2010 has resulted in a major decline in construction activity during Q1 2010 in Poland, according to the latest report by market research company PMR.

The report, Construction sector in Poland, H1 2010 - Development Forecasts for 2010-2012, said the winter meant many projects were delayed with the result that growth for 2010 is now expected to remain at 2009 levels - +4 to +5%.

Looking further ahead the report said growth is expected to be stronger in 2011 and 2012.

Civil engineering is expected to remain the main driver of the country's construction sector, but growth will be significantly below the +27% seen in 2009. This, said the report, will be due to the shrinking number of projects started during 2010.

"Given that an overwhelming majority of civil engineering schemes are public projects, we should only expect that more delays can occur," said the report's author, Bartlomiej Sosna, senior construction analyst at PMR.

"Notwithstanding that, road and bridge construction will maintain a high level of capital expenditure in the coming years, and will continue as the main driving engines for the civil engineering sector."

Mr Sosna added that future growth will be also fuelled by investments in water, sewage and power sectors.

With many commercial projects delayed, the non-residential sector is expected to show a further decline in 2010, following a -13% fall in 2009. No upturn is expected until 2011-2012.

Following a fall of -23% in activity in 2009, the residential sector is expected to decline at a slower rate thanks to the number of new projects started in Q1.

"We expect the number of residential construction projects started in 2010 to rise. Consequently, 2011 and 2012 should see a marked improvement in construction output of residential construction, which will be also helped by an upturn in the mortgage loan market," said Mr Sosna.

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