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Poland Infrastructure Report Q2 2012
Business Monitor International, March 2012, Pages: 86
BMI View: The artificial demand created in the Polish construction industry is beginning to subside as projects near completion ahead of the Euro 2012 football tournament. Going forward, BMI expects the segment to suffer from a handover of this investment boost and, accordingly, forecasts a slack 3% yearon- year (y-o-y) annual average growth in construction industry value over the period 2012-2016, marking a clear slowdown compared with the 11.3% growth seen between 2006 and 2010.
After an estimated 4.1% y-o-y growth in real terms during 2011, we expect construction industry growth to be affected by weaknesses in both the infrastructure and the residential and non-residential building segments during 2012. Growth in the residential and non-residential building segment will be limited to only 2% y-o-y in 2012, while infrastructure will grow at only 3.4%.
Some of our cautious outlook for the construction segment also comes from the potentially detrimental impact the ongoing slowdown in the eurozone will have on investor sentiment and credit availability in the region. The upside, however, is that Polish investment growth is expected to remain relatively strong, as the country is expected to attract significant foreign direct investment as one of the growth outperformers in the region, at a time when the eurozone is entering recessionary territory.
Key growth drivers during the remainder of the forecast period include:
- Road building programme: Poland's road building programme, running from 2007 to 2015, is expected to draw US$60bn of investment into the sector. The programme has been a blessing for European construction majors and Poland's largest builders, which have faced depleted contract opportunities in other core European markets.
- EU Cohesion funds: The EU has allotted substantial funding for Poland's infrastructure sector in an effort to integrate the country into the EU's transport and energy networks. Geographically placed between Eastern and Western Europe, it is hoped Poland will act as a bridge between the two.
- Renewable and nuclear power growth: A slew of gas, coal and renewable projects are in the pipeline, driving industry growth expectations. In January 2012, Polish electricity utility Tauron signed a contract with Spanish utility Iberdrola for the construction of a wind power plant in the north-west region of Poland. In the previous month, Spain’s Acciona Energy announced that it had begun building a new 38MW wind park in Poland's Lubuskie province. Acciona is also constructing another 33MW wind park at Krobia, in the district of Gostyn. The greatest boost to the energy and utilities segment will potentially come from plans to construct two nuclear power plants. Construction is planned to start in 2016 (to be completed in 2022), at an estimated combined cost of EUR15-18bn.
- Housing Demand: Stronger economic growth over the coming years should see demand for housing return. We expect to see a significantly higher number of apartments coming on to the market, as increased mortgage lending and higher levels of employment stimulate demand. Despite the slowdown, we remain optimistic in our cement sector forecasts, as we expect Polish cement production to be a major beneficiary of the large-scale construction projects likely to be undertaken in the country. Industry estimates show that Polish cement production ranks as the seventh-largest in Europe and as much as 98% of this is domestically consumed. As such, in line with our forecast of an average 6.4% y-o-y growth in domestic demand, we expect production to grow by an average of 6.5% y-o-y between 2012 and 2016.
Business Monitor International's Poland Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Poland's infrastructure industry.
BMI Industry View
Poland Infrastructure Industry SWOT
Table: Poland EQS
Table: Poland Cement Production and Consumption Data
Industry Forecast Scenario
Table: Poland Construction And Infrastructure Industry Data
Construction and Infrastructure Forecast Scenario
Table: Poland Transport Infrastructure Industry Data
Transport Infrastructure Outlook and Overview
Major Projects Table – Transport
Energy and Utilities Infrastructure
Table: Poland Energy and Utilities Infrastructure Industry Data
Energy and Utilities Infrastructure Outlook and Overview
Major Projects Table – Energy and Utilities
Residential/Non-Residential Construction and Social Infrastructure
Table: Poland Residential and Non-residential Building Industry Data
Residential/Non-Residential Building Outlook and Overview
Major Projects Table – Residential, Non-Residential Construction and Social Infrastructure
Poland Risk/Reward Ratings
Regional Infrastructure Risk Reward (Rr) Ratings
New Infrastructure Data Sub-sectors
Construction Sector Employment
Infrastructure Business Environment Rating
Table: Infrastructure Business Environment Indicators
- Mostostal Warszawa
- Skanska Poland
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