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End of crisis in the Polish building market? 8% growth expected in 2015

The Polish building market will record growth of 8% in 2015, analysts in the country have forecast. They say the time has come for a rebound following the crisis of 2012 and 2013, with investment in the energy and rail sectors and stabilisation in the construction sector the main drivers of improvement. EU funds will be a key part of this process.

Optimistic data

The Polish firm ASM (Centre for Market Research and Analysis) published data on construction in the country at the end of November. According to the findings, the greatest influence on building output was from civil engineering and the construction of buildings – production was worth 29.2 billion zloty ($8.7 billion) in the first nine months of 2014, 15.5% higher than over the same period last year. Non-residential construction was also of great importance – output totalled around 19.2 billion zloty ($5.7 billion), 1.9% higher than from January to September 2013. Housing, however, had a negative impact on output, showing a 1.2% contraction from the previous year. Despite this, the number of permits issued and house building projects started (according to data form the Polish state statistical service, permission was given for 133,622 houses to be built) is raising hopes of an increase in housing construction in 2015.

As Deloitte expert Maciej Krokosinski has noted, it is hard to talk about a significant improvement in the condition of the building industry as a whole, but it seems likely that Poland’s construction industry crisis is behind it. Furthermore, forecasts are quite optimistic - following growth of 6% in the first half of 2014, the sector is expected to end 2014 showing a 4-6% growth over the year.

The data compiled by Deloitte shows that in the first half of 2014, the revenues of the nine largest Polish companies listed on the Warsaw Stock Exchange grow 6% year on year.

As for 2015, the Polish construction sector will gain momentum from EU funds, which will contribute to growth of 6-8%.

Analysts at PMR are forecasting a similar rate of growth – 8% in 2015. In a report entitled ‘The Polish construction sector in the second half of 2014 – development forecasts for 2014-2020’, they state that a number of tenders will be put out in 2015, including construction of a petrochemical complex by Azoty and Lotus planned for the first quarter of 2015. This could lead to orders worth up to 12 billion zloty ($3.6 billion).

Planned investments are also promising improvement in the building market. A multifunctional complex with the working name of August 1 will be built in the Mokotów district of Warsaw, covering 164,000 sqm and eventually containing six eight-storey A Class office buildings.

In Lódz, meanwhile, the Airport Business Park is planned – an office complex of eight buildings over a total area of approximately 40,000 sqm. Part of the plot will also be used for recreational space. Among the investment in housing is the planned Mokotów City in Warsaw – the nine-storey building will have commercial spaces on the ground floor, offices in the middle floors, and apartments at the top.

Looking to the future

2015 looks optimistic for the Polish building market – the time when it will start to exit the crisis it has been struggling with in recent years. Analysts predict that more visible growth will be recorded in 2016, 2017 and 2018, when the investment that is starting to appear now will gain momentum.

An improving economic situation will mean greater demand for services and building materials, and this in turn means greater demand for opportunities to find trusted business partners. Knowledge of the industry, keeping up with the latest developments and cooperation with reliable firms are key elements in successful projects.


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