PMR Report: Continued growth in the construction market

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The past two years have been a period of strong growth of the Polish construction market. In 2017, the long-awaited commencement of infrastructure investments co-financed with EU funds from the current budget took place. As a result, construction and assembly production increased. The year 2018 brought a strengthening of the scale of growth in the construction industry.

We estimate that in 2018, construction and assembly production in companies employing more than nine employees increased in real terms by about 17%. In the division of construction and assembly production by type of performed works, the construction and assembly production in the category of engineering works increased the most – by over 23% y-o-y. The level of construction and assembly production in the “construction of buildings” category increased only slightly less.

The increase in sales of construction services in 2017 and the increase in their dynamics in 2018 made the barriers related to the supply side of the business increasingly problematic for construction companies. At the end of 2018, the degree of utilisation of production capacity in the construction industry amounted to 86%. In some months of 2018 it exceeded 87% (GUS data). In our opinion, these data indicate that the market is already on the verge of its supply capacity. Without an increase in investment outlays or strategic changes, it may be difficult to maintain dynamic production growth. The easiest way to increase production capacity – increase employment – is currently extremely difficult.More information in PMR’s report: Construction Sector in Poland H1 2019. Market analysis and development forecasts for 2019-2024.