Ten post dostępny jest także w języku: polski
Material shortages and price increases have affected September’s construction and assembly production results in Poland. Although analysts had expected a 10.2% increase from August 2021, according to data presented by the Central Statistical Office (GUS), the growth was 9.3%. September’s results mean that the pace of production growth may slow down in the coming months, which in turn will translate into GDP.
According to Monika Kurtek, chief economist at Bank Pocztowy, the lower results concern both market expectations and the dynamics of construction and assembly production. As she underscores, the demand for construction projects is still high, and the September weather conditions encouraged investments, so these are not factors that slow down the sector’s development. The estimated growth rate of construction and assembly production reached around 6% y-o-y in the third quarter of 2021, a marked improvement compared to around 2% y-o-y growth in the second quarter of this year.
However, it is worth bearing in mind that despite high demand, both the construction sector and industry will face material shortages and price increases. This, in turn, will translate into production costs, as well as delays in project implementation. With these factors in mind, it can be said that problems in the construction market will be associated with a slowdown in GDP growth.
Weaker results are not in all sectors
According to Jakub Rybacki, an analyst at the Polish Economic Institute, construction and assembly production growth slowed down from 10.2% to 4.3%, and these results are lower than market forecasts, which predicted a growth of 8.3%. Analysing the GUS data, one may notice weak results in the erection of buildings and infrastructure investments, as well as increases in specialised works, such as preparatory and finishing works of the construction process or geological works. The effect of rising material prices is also visible, which translates into the reduced activity of companies.
Bank Pekao‘s comment published on Twitter shows that the slowdown in construction and assembly production is 2% month-to-month in seasonally adjusted terms. The problem is also a hole in public investments, which is reflected in the results that record a -9% decline from the production peak. As PKO BP adds, the construction industry’s performance is also linked to a slowdown in infrastructure investment and among developers. It is caused by supply constraints, lower land availability, and staff shortages.
According to the Central Statistical Office (GUS), assembly production in September 2021 increased by 4.3% year-on-year and rose by 9.3% compared to the previous month. However, some analysts had forecast production growth of 8.2% y-o-y and an increase of 10.2% on a monthly basis.
During last year’s, 5th edition of the PMR industry Forum: CONSTRUCTION IN POLAND 2021, according to a poll conducted among the guests of the event, the biggest challenge the industry had to face in the last year was filling the order books and the observed weakening of demand for construction services. Interestingly, only 1% of the poll participants indicated at that time that it was the rising costs of construction materials that would pose the biggest challenge for the construction industry, which is now becoming the industry’s biggest problem. This is confirmed by the results of this year’s survey, PMR data and opinions of Forum participants. Problems with rising prices of construction materials and their availability are currently the biggest barriers to construction companies’ current operations. Only slightly less severe, in the opinion of construction companies, are problems with the availability of workers, both skilled specialists and basic labor force. More: The sector at the threshold of large investments in the time of turbulence on the construction materials market. The annual industry debate “6th Forum Building Sector in Poland” is behind us!.