Poland better than expected
By Sandy Guthrie28 April 2016
The Polish construction industry expanded at a year-on-year real growth rate of approximately 4% in 2015, according to research firm PMR.
This figure compares to a preliminary estimate of 2.8% from the Polish Central Statistics Office (GUS).
PMR said that stronger than official growth of the market in 2015 was also suggested by an increase of over 10% in the aggregated revenue generated by 30 construction contractors whose shares are listed on the Warsaw Stock Exchange.
Despite the weak initial months of the year, 2016 still has a substantial growth potential, said PMR, mostly on the back of the continued upturn in the segments of industrial and warehouse construction and residential construction – not only by developers but also individual investors – as well as the execution of large-scale power projects and an “impressive” amount of fast-road projects awarded.
The findings have been produced in PMR’s latest report, Construction Sector in Poland, H1 2016 – Market Analysis and Development Forecasts for 2016 to 2021.
Despite the growth potential, PMR said that the industry would not be able fully to make up for the poor start to the year in the forthcoming months. PMR therefore provided a downward revision of forecasts, which still, however, predicted that the market would grow in 2016.
PMR said, “Given a slower growth rate projected for 2016, the record level of construction output delivered in 2011 is unlikely to be surpassed this year as yet. That is more likely to occur only in 2017.”
It said that in terms of construction output generated by companies employing more than nine people, civil engineering construction was the largest segment as it again contributed over 55% of the value of construction works completed in 2015.
With regard to the value of construction output generated by all companies, non-residential construction was the largest segment, representing more than 40% of the market. Residential construction represented the smallest market segment in both rankings, it said.
When it came to building permits for non-residential projects, PMR said that 2015 had seen growth of an impressive 17% in the area of buildings planned. This figure, though, was a result of a relatively poor 2014, which was the worst year in terms of building permits in over a decade.
PMR added that the expansion of the non-residential construction segment in the coming quarters would be mostly driven by the construction of industrial and warehouse buildings, and agricultural buildings.
In civil engineering construction, PMR pointed to the positive fact that during the current financial perspective, the peak in construction activity in the road and railway segments would not come at the same time. It said this was similar to the previous financial period.
It said that while contracts for a considerable number of road projects had already been awarded, most of the major projects in the railway sector were in the initial tender stage or even in the conceptual phase, and they were unlikely to translate into tangible growth in construction activity anytime soon.
The road construction sector will, traditionally, report the highest average-annual output in 2016 to 2021, said PMR. It added that in terms of output growth, railway construction and industrial construction were poised to see the fastest increases in 2010 to 2015, supported mostly by the power sector.
“Importantly,” it said, “construction companies operating in Poland intend to step up their foreign operations so as to secure their interests in the years following 2020.
“The companies focus on different markets of the neighbouring countries, starting from the Baltic States through to Belarus, Ukraine, Slovakia, the Czech Republic, Germany and Scandinavia. It is much less often the case that Polish construction firms plan to expand to far-off corners of Europe, and if they do, they tend to do so as subcontractors.”