Construction sector in Poland, H2 2009
Rising optimism in the construction sector
A survey conducted by research and consulting company PMR for the needs of the “Construction sector in Poland, H2 2009 – Comparative regional analysis and development forecasts for 2009-2012” report reveals certain improvement in the mood among the larges construction companies operating in Poland. However, construction firms are still very far from optimism levels seen in 2006-2008 regarding market situation.
Over one-fifth of the largest construction companies assess the situation in the Polish construction sector as positive, whereas six months ago, a mere 9% of respondents shared this view. Likewise, companies’ predictions about the development of the construction market situation in the next 12 months demonstrate stronger optimism than in March 2009 – 42% of companies surveyed predict that the market situation will improve, while a paltry 14% expect that it will continue to deteriorate.
Polish construction companies’ assessment of portfolios of orders has improved to some extent as well – 39% of respondents provided positive assessment of the current number of orders (compared with 31% six months earlier); 30% of companies surveyed held the opposite view. Additionally, companies are more optimistic about the future size of their order portfolios – 49% of respondents expect the number of orders to grow in the next 12 months, while 20% of major builders anticipate falls in the number of orders.
Good financial standing of construction companies
The financial situation of the largest construction companies continues to be rated as good – 71% of companies surveyed believe this to be the case (compared to 60% six months ago). 32% of the major building companies in Poland anticipate that at the end of 2009, the financial standing of their enterprises will be better-off compared to the situation in 2008; exactly the same proportion of respondents take the opposite view. “As a result of deflation in the construction industry, many of the contracts concluded in 2008 and executed in 2009 will carry higher-than-
Improvement in PMR Construction Climate Indicator
A special summary index portraying the level of the market situation in the Polish construction industry is created on the basis of assessments of the current market situation, the financial standing and portfolio of orders obtained by construction companies. In September 2009, the PMR Construction Climate Indicator had a value of 5.5 pts, showing certain improvement in the market situation in the construction sector in the past six months.
According to companies surveyed, the most attractive segments of the construction market in the two-year horizon include roadwork projects (84% of responses), sports and recreation facilities (31%) power engineering construction (31%) and environmental protection construction (24%). At the opposite end of the spectrum were the following sectors: office construction (5%) and warehouse construction (9%), which were considered the least promising segments of the construction market in the coming two years. The responses largely reflect the current situation in the construction market where road building projects constitute the main driving force behind growth in the construction industry – in the initial three quarters of 2009, the segment reported a year-on-year increase in construction and assembly output of over 40%. In the same period, the growth rate for the entire civil engineering construction segment was over 25%, making up for declines in residential and non-residential construction (-12.8% and -6,5%, respectively)
“In the coming months, we expect continued falls in construction and assembly output generated by the construction of buildings, which, however, will be made up for by rapid growth in civil engineering construction. The Polish construction market will return to a sustained growth path only after the commercial construction situation has stabilised, which is not to be expected earlier than the middle of 2010. However, it all largely depends on the anticipated growth in lending activity of financial institutions,”
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