The Czech Republic's infrastructure sector continued to struggle under uncertainty this quarter despite official figures suggesting that 2009 performance was above that previously expected. Industry results combined with the latest quarterly data from the statistics agency indicate a much weaker market, thus suggesting a discrepancy between 2009 estimated data and the actual situation reported on the ground. BMI forecasts Czech Republic's construction industry will continue to suffer in 2010 with industry value of just US$12.67bn compared with a peak of US412.9bn in 2008.
Our forecasts were guided by:
* The anticipated sharp drop in gross fixed capital formation, which materialised at -18% for FY2009. This is likely to impact project finance, casting further doubts over project schedules. This is compounded by the weak political leadership in the country resulting from the interim split parliament.
* A bearish regional outlook for Central and Eastern Europe in the aftermath of the credit crunch continues to affect investor confidence. A slowdown in project announcements this quarter compounds the view that investors are holding back from infrastructure commitments within the Czech Republic until the macroeconomic situation improves.
* The only major project announcements this month originated from the power sector. National operator CEZ announced plans to invest in a large-scale wind project in Poland. The company also submitted environmental documents pertaining to its proposed Temelin nuclear development.
We forecast construction industry value growth of 2.3% on average per year between 2010 and 2014, with industry value rising from CZK240bn in 2009 to CZK300bn by 2014. The infrastructure sector will drive growth, with industry value rising from CZK127.8bn in 2010 to CZK153bn in 2014.
Most indicators point to a weak picture for the Czech Republic's construction industry. Based on a survey of business sentiment in the sector, confidence in the sector remains weak, though expected total demand shows an uptick in the first months of 2010. Long-term infrastructure orders fell by 18% year-on-year (yo- y) in real terms over 2009, which indicates reduced activity for the coming quarters; the 2009 decline continued in the first quarter of 2010, falling by another 18% y-o-y.
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Report Table of Contents:
Executive Summary
SWOT Analysis
- Czech Republic Infrastructure SWOT
- Czech Republic Infrastructure Project Finance SWOT
- Czech Republic Economic SWOT
- Czech Republic Political SWOT
Market Overview
- Czech Republic
Industry Forecast Scenario
- Table: Construction And Infrastructure Industry Data
- Construction And Infrastructure Forecast Scenario
Transport Infrastructure
- Table: Construction And Transport Industry Data
- Transport Infrastructure Forecast Scenario
- Transport Infrastructure Overview
- Road And Rail Heavy
- Airports Developing In Tandem With Tourism Industry
- Natural Transport Networks
- Major Projects - New And Ongoing Projects
- Airports
- Roads
- Railways
- Major Projects Table - Transport
- Table: Major Infrastructure Projects
Energy And Utilities Infrastructure
- Table: Construction And Utilities Industry Data
- Energy And Utilities Infrastructure Forecast Scenario
- Energy And Utilities Infrastructure Overview
- Power Sector Grows As Demand Returns
- Major Projects - New And Ongoing Projects
- Power Plants
- Pipelines
- Water
- Major Projects Table - Energy And Utilities
- Table: Major Infrastructure Projects
Business Environment
- Czech Republic Business Environment
- Rewards
- Risks
- Regional Overview
- Eastern Europe Infrastructure Business Environment Ratings
- Table: CEE Infrastructure Business Environment Ratings
Project Finance Ratings
- Czech Republic Project Finance Ratings
- Design And Construction
- Commissioning And Operating
- Overall Project Finance Rating
- Regional Overview
- Project Finance Ratings: Outlook For Central and Eastern Europe
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
Macroeconomic Outlook
- Table: Czech Republic - Economic Activity
Political Outlook
- Domestic Politics
- Long-Term Political Outlook
Company Monitor
- Skanska CZ
- Metrostav
- PSJ, a.s.
Global Overview
- Core Views
- BMI's Core Views For Infrastructure Sector
Methodology
- New Infrastructure Data Sub-sectors:
- Infrastructure Forecasts: Methodology
- Sources
- Industry Forecasts
- Construction Industry
- Data Methodology
- Construction
- Capital Investment
- Construction Sector Employment
- Infrastructure Business Environment Rating
- Table: Infrastructure Business Environment Indicators
- Project Finance Ratings
- Table: Design And Construction Phase
- Table: Commissioning And Operating Phase - Commercial Construction
- Table: Commissioning And Operating Phase - Energy And Utilities
- Table: Commissioning And Operating Phase - Transport
- Sources
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