 |
|
|
fpo50px |
 |
 |
nefpo100090s |
 |
As a result of an exceptionally severe winter, Q1 2010 was characterised by a major decline in activity on Polish construction sites, with the majority of construction firms delaying projects. These delays are bound to curtail growth in the construction industry in 2010 that will, at best, continue at last year’s rate of 4-5%.
The latest (nineteenth) edition of the report entitled “Construction sector in Poland, H1 2010 – Development Forecasts for 2010-2012” published by research and consulting company PMR presents a downward revision of forecasts for the construction market for 2010. Alternatively, the outlook for the industry for the years 2011-2012 has improved.
According to the authors of the report, civil engineering will continue as the driving engine of the Polish construction industry, but its growth will be significantly below the 27% level posted by the segment in 2009. This will be due to a higher base of comparison and delays in the execution of several major civil engineering projects, so the number of projects underway will shrink. Given that an overwhelming majority of civil engineering schemes are public projects, we should only expect that more delays can occur.
Notwithstanding that, road and bridge construction segments will maintain a high level of capital expenditure in the coming years, and they will continue as the main driving engines for the civil engineering sector. Strong growth will be also fuelled by investments in water and sewage system infrastructure construction as projects in this area began to strongly move forward in recent months. The power sector is also expected to accelerate – the number of planned investment projects in this branch has steadily grown, but they will be implemented over extended periods of time.
Since many large commercial projects have been suspended or delayed, and also given lower investments in the economy, in 2010 non-residential construction will again register a decline, after a 13% decrease in 2009. A strong upturn in non-residential construction is likely only in 2011-2012, and it will occur mostly on the back of recovery in the financial sector and stronger growth in the Polish economy. PMR analysts are still expectant of more rapid growth in the sector of public buildings, stemming from a large number of construction contracts signed in the last several months. This should at least partly offset the declines suffered by the commercial construction segment.
Suspension of numerous projects by developers in 2008-2009 resulted in a hefty decrease of 23% in construction and assembly output generated by the residential construction segment in 2009. 2010 is likely to see continued declines in this segment, but they will not be as substantial as in 2009, due to new projects started by developers.
“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,” comments Bartlomiej Sosna, Senior Construction Analyst at PMR and the author of the report.
“Information released by the largest developers in recent months suggests that the supply of developer-built housing will be beginning to rebuild as early as 2010. However, due to the length of the investment cycle, in 2010-2011 we can expect a decline in new dwelling completions, which will mostly result from a lower number of projects started in 2008-2009. More homes will be delivered onto the market only in 2012,” adds Bartlomiej Sosna.
Given the forced work stoppages at construction sites during winter and having to make up for the resulting delays, PMR analysts anticipate the construction market to grow at a similar rate as it did in 2009, at around 4-5%. Construction and assembly output should accelerate in 2011-2012, driven mostly by more rapid economic growth, intensive execution of civil engineering projects and improvement in building construction. “It should be noted that if the weather conditions are mild in Q1 2011, the construction industry can begin the next year with exceptionally strong growth due to a low base of comparison,” sums up the analysts.
As far as the most attractive segments of the construction market are concerned, road construction remains the leader – it is the most interesting sector of the market for 76% large construction companies, taking into account a two-year time horizon. But it should be noted that its appeal has fallen slightly – in March 2009, it was selected by 88% construction firms. Road construction is followed by power sector construction; it was selected by fewer respondents than in the previous rounds of the survey as well.
The third most often mentioned branch was environmental protection construction, whose attractiveness still continues at a relatively high level. It should be noted that residential construction steadily regains the popularity it enjoyed in the past. In the March 2009 survey, it was the least frequently selected option (5%), while in the last survey, it ranked fourth (18%). A substantial decrease in popularity was registered by construction of sports and recreational facilities, which is principally due to the completion of tender procedures concerning the bulk of large sports buildings. • May 2010
Source: PMR Publications • This press release is based on information contained in the latest PMR report entitled “Construction Sector in Poland H1 2010 – Development Forecasts for 2010-2012” (author: Bartlomiej Sosna, Senior Construction Analyst)
