2012-10-29 14:37:16 - New Construction market report from Business Monitor International: "Poland Infrastructure Report Q4 2012"
BMI View: We warn of more downside risks to our already cautious outlook for the Polish construction industry during 2012 and 2013 (which is forecast to grow by a modest 1.8% year-on-year (y-o-y) and 2.4% y-o-y, respectively) as financial problems of domestic players come to the surface. Between 2012 and 2021, we anticipate the industry to post lacklustre annual average growth of 3.6% - a far cry from the average 9% y-o-y growth recorded between 2007 and 2011.
While unfavourable base effects and the end of key projects will certainly make strong growth difficult to attain, increasing financial difficulties of domestic companies - as a result of stiff competition and poorly structured tendering procedures - will add to the overall slowdown
in the sector. As more local companies go under, banks will become less confident about lending to the sector, precipitating a credit crunch for domestic projects and increasing reliance on government and EU funding. We expect both the infrastructure and the residential and non-residential building segments to weaken going forward.
Full Report Details at
- www.fastmr.com/prod/464542_poland_infrastructure_report_q4_2012. ..
However, projects which will keep growth in the sector intact are as follows:
* 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 much sought-after A1 motorway road project seems to be picking up momentum, after Polish authorities, in July 2012, were reportedly inviting design and construction tenders for eight sections of a 180km stretch of the A1 highway. In the same month, Swedish construction firm Skanska secured a PLN245mn (US$71.28mn) contract to build a 2.8km road in Silesia in south-west Poland.
* Renewable and nuclear power growth: A slew of gas, coal and renewable energy projects are in the pipeline, driving industry growth expectations. We see solar and offshore wind power being significant beneficiaries of government support, after a draft bill released by the Polish economy ministry on July 27 2012 proposed support for these power sectors, while scaling back support for biomass and onshore wind power. In addition to these, the Polish energy and utilities segment will also receive significant boost from the government's plans to construct two nuclear power plants.
* Non-Residential Demand: The outlook for non-residential sector is changing for better. H112 saw the addition of 65,000 square metres (m2) of new office space in the major cities in Poland (excluding Warsaw), with another 490,000 m2 under construction.
Poland continues to lead the region in our ratings due to its stable business environment. However, a maturation of the infrastructure environment will mean more limited scope for investors in the future, with lower returns on more capital intensive projects gradually becoming the norm. Continuing uncertainty within the country's largest trading partner, Germany, also weighs on our risk rating. The country has, accordingly, seen its score in BMI's risk/reward ratings for the infrastructure industry in Europe drop from 66.6 points in the last quarter to 65.7 points this quarter.
Partial Table of Contents:
BMI Industry View
- Poland Infrastructure Industry SWOT
- Competitive Landscape
- Table: Poland EQS
- Table: Cement - Price/Volume % Variances (9m10/9m11)
- Cement Forecasts
- Table: Poland Cement Production and Consumption Data, 2009 - 2016
- Table: Poland Cement Production and Consumption Long-Term Forecast, 2014 - 2021
Industry Forecast Scenario
- Table: Poland Construction And Infrastructure Industry Data, 2008 - 2016
- Table: Poland Construction And Infrastructure Long-Term Forecast, 2013 - 2021
- Construction and Infrastructure Forecast Scenario
- Table: Poland Transport Infrastructure Industry Data, 2008 - 2016
- Table: Poland Transport Infrastructure Industry Long-Term Forecast, 2013 - 2021
- Transport Infrastructure Outlook and Overview
- Major Projects Table - Transport
- Table: Major Projects - Transport
Energy and Utilities Infrastructure
- Table: Poland Energy and Utilities Infrastructure Industry Data, 2008 - 2016
- Table: Poland Energy and Utilities Infrastructure Industry Long-Term Forecast, 2013 -2021
- Energy and Utilities Infrastructure Outlook and Overview
- Major Projects Table - Energy and Utilities
- Table: Major Projects - Energy and Utilities
Residential/Non-Residential Construction and Social Infrastructure
- Table: Poland Residential and Non-residential Building Industry Data, 2008 - 2016
- Table: Poland Residential and Non-residential Building Long-Term Forecast, 2013 - 2021
- Residential/Non-Residential Building Outlook and Overview
- Major Projects Table - Residential/Non-Residential Construction and Social Infrastructure
- Table: Major Project - Residential/Non-Residential Construction and Social Infrastructure
- Poland's Risk/Reward Ratings
- Regional Overview
- Central and Eastern Europe Infrastructure Risk/Reward Ratings
- Table: BMI's Central and Eastern Europe Risk/Reward Ratings
- Mostostal Warszawa
- Skanska Poland
- Table: BMI Infrastructure Index - YTD Top Performers (%)
- Table: BMI Infrastructure Index - YTD Worst Performers (%)
Full Table of Contents is available at:
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