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Pessimistic forecasts for the construction sector

KPMG, CEEC Research and Norstat Poland prepared a report Construction in Poland, 2013.

Year 2013 brought a forecast of reduction of any further growth in companies managing constructions in Poland. According to the latest report given by advisory company KPMG, CEEC Research and Norstat Poland, they expect further falls in construction growth. The 2014 forecasts are pessimistic as well.

Study indicates that the decline in production could reach 11%, which means a big difference comparing to predictions from March 2012. Then the fall of business construction was forcasted at 4,3% ,in 2013. According to the report, up to 80% of administrators predicted its fall, while 13% of surveyors expected its growth.

Polish construction joined other countries of the Wyszehradzka Group and after years of rapid growth it starts to drop. In the first year of the crisis, it will result in an increase of unemployment in this sector, it will increase bankruptcy and will cause intensive fights between the companies over new contracts. Large companies will operate to use up their capital reserves, but the small and medium-sized companies will hit crisis in the first place - says Jiri Vacek, CEO, CEEC Research.

Managers' predictions slightly improved with regard to the competition results. Despite the fact, the volume is low. More certain of their position on the market are large companies. Nearly every second of their representatives,(49%) expects to strengthen their position in relation to competitors in 2013. Representatives of small and medium-sized enterprises, however, have lower self-confidence - only 32% of them expect to improve their position against competitors - commented Steven Baxted, Partner, Head of the Advisory Panel for the construction sector and Real Estate at KPMG, in Poland.

What does make the predictions so pessimistic? The report also includes the barriers hampering the companies' development, which explains the source of problems. First and foremost, these are the high cost of labour, strong competition and the bureaucracy. The insufficient demand makes it worse too.

The research indicates that the administrators plan to increase the expenditure to increase the operational efficiency. In addition, they are aware of the importance of other areas that require improvement, such as purchasing processes, optimization of financial resources or the selection of a strategic partner.

Full PDF version version of the report is shown below.

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