PRZOOM - /newswire/ -
Cracow, Malopolskie, Poland, 2011/09/22 - In the coming years Bulgaria's construction sector will start to grow slowly following the hard years of the economic slowdown, although no spectacular changes are expected in the short run.
After substantial restructuring of the sector moderate construction market recovery in the period 2012-2013 is expected. Until 2015 the sector will grow on the back of the large-scale infrastructure projects related to EU funds.
According to the report “Construction sector in Bulgaria 2011 – Development forecasts for 2011-2013”, published by the research company PMR, civil engineering infrastructure will be the driving force of the recovery of the Bulgarian construction market in the years to come. In line with the priorities of the European programmes, road infrastructure together with ecological construction is attracting the interest of many construction players. In fact, in the last two years there is a marked tendency for the more adaptive construction companies to restructure from building to engineering construction, confirming the accuracy of the expectations for the segment’s future development.
The first half of 2011 was very difficult for Bulgarian construction companies, noting a decline of more than 10%. However, by June the decline was already much milder and, despite the deeper fall in July, for the second half of the year PMR analysts expect further improvement and the first growth in construction activity. As a result, the decline for the whole of 2011 will not be as severe – in the region of 3%.
From 2012 engineering construction will start to develop faster, supported by the active launch of the procedures under the Operational Programs for: Regional Development, Transport and Environment, which will provide financial resources of €4bn by 2013 for the implementation of different infrastructural projects. Utilisation of these resources will allow construction companies operating under these programs, as well as related industries and suppliers, to constantly mitigate, reduce and overcome the negative effects of the crisis. However, all depends greatly on the capacity of the public administration to accelerate the absorption of EU structural funds. Another encouraging sign is the expected investments in the energy sector in upcoming years, which should firmly establish the energy sector as one of the most dominant in the economy and as one of the driving forces in the construction industry.
In residential construction the slow recovery from the crisis is set to continue in 2012. The balance between supply and demand is gradually restoring resulting from developers’ low investment activity. Some slight movement in the construction market is expected during the second half of 2011, activating investors in the segment and reviving the reduced supply of new residential properties. In 2011 some stabilisation of sales and rental prices in the segment has occurred. For the country as a whole it is possible to register a slight growth. Increasing flexibility and buyers’ ingenuity are leading factors in the market’s reactivation. The first half of 2011 featured a larger total number of residences sold compared to H1 2010 albeit at much lower prices.
As a result of a slowdown in the housing market, only 15,800 dwellings (almost 1.1 million m²) were completed in 2010, down by more than a third relative to 2009. PMR expect the downward trend to continue in 2011 with around 12,000 dwellings being completed, mostly the result of a reduced number of housing starts in 2008-2009. However, the long-term outlook for the residential construction sector is much more positive.
This press release is based on information contained in the latest PMR report entitled ”Construction sector in Bulgaria 2011 − Development forecasts for 2011-2013”.