ARTICLES LABELLED WITH TAG construction

March was the twelfth consecutive month to see decreases in confidence in the construction sector. The seasonally-adjusted confidence index dipped into negative territory, and it plunged to a three-year low. Since the March survey does not reflect a completely new economic reality, it is expected that construction confidence will fall dramatically in April.

Business confidence among Polish construction companies tumbled early this year, with the heaviest burden, as perceived by the enterprises, coming from labour costs and tax levies. Decline in confidence is chiefly due to such factors as an over 15% increase in the minimum wage and a 10% hike in social insurance contributions faced by sole traders operating in the construction industry. On top of that, large construction businesses are required to conduct Employee Capital Schemes (PPK) or the alternative solution of Employee Pensions Schemes (PPE).

The top 40 construction companies operating in Poland posted a record aggregate revenue in 2018, breaking the previous revenue high set in 2011. Besides an improved volume of work, the revenue hike was also largely driven by rising prices of building materials and labour.

Polish modular producer Polcom will be able to expand its operations thanks to a financial package provided by a consortium of banks to which the EBRD is contributing PLN 108.43 million (€25 million equivalent).

ProperGate has signed a cooperation agreement with CFE. The intelligent logistics management system, developed by ProperGate, will be pilot tested at the construction site of one of the biggest retail centres in the Mazury district.

The aggregate net profit of the 30 largest commercial property developers in Poland hit an all-time high of €230 million (PLN 985 million)  in 2018, which translated into a net profit margin of 25%. The latest data from the investment transaction market and property developers’ interim financial statements indicate that 2019 can be as good a year as 2018 was for the industry in terms of profitability.

The total value of 230 office, retail, warehouse and hotel projects, both ongoing and planned, which are conducted by top 30 property developers is estimated at nearly €10 billion, according to the latest report by research company Spectis.

The value of output generated by the Polish construction industry has reached an all-time high level on the back of several years’ investment upturn and it is expected to come close to €59 billion (PLN 250 billion) in 2020. In nominal terms, the market’s value is impressive, but it is less so when one looks at the volumes of construction work being performed and building materials used. A noteworthy fact is that the growth in the market’s value is boosted by rising prices of building materials and higher labour costs.

Labour shortage and rising costs in construction are problems developers in CEE have had to learn to live with over the past years. Dr. Zoltán Nádasdy MRICS, Partner, Head of CEE Real Estate Investments Group at Noerr talked to Property Forum about the legal challenges investors and developers face on the Hungarian, Romanian and Polish markets.

Despite the fact that the Polish construction market is projected to grow at a slower pace in the coming years, investment potential remains considerable for most of the regions. The total value of the 960 largest investment projects underway or planned in Poland is estimated at a staggering PLN 420 billion (€100 billion), i.e. nearly twice as much as the annual value of the construction market as a whole, according to the findings of the latest report from research company Spectis, “Construction market in Poland 2019-2025 – an analysis of 16 regions”.