2012-10-24 16:21:54 - New Construction research report from Business Monitor International is now available from Fast Market Research
BMI View: The Czech Republic's construction and infrastructure industry value continue to experience negative growth due to limited cash flow, restraint on public spending, potential freeze of EU funds and the repercussions of an increasingly stagnant Europe amid financial turmoil. This resulted in an estimated 7.2% year-on-year (y-o-y) contraction in construction industry value in 2011. Hopes for 2012 aren't much better, with a contraction of 2.3% anticipated. Although we expect the market to return to positive growth territory in 2013 (we forecast annual average real growth of 2.4% between 2013 and 2016), hopes of a robust recovery remain a distant possibility.
Full Report Details at
- www.fastmr.com/prod/479414_czech_republic_infrastructure_report_ ..
The factors which underpin our cautious outlook for the sector over the forecast period
* The transport infrastructure sector is likely to post another year of contraction in 2012 and only marginal growth thereafter. This lack of momentum is owing to a cut in budget allocation, made worse as the next batch of EU funding, equal to around US$1bn, is likely to be cancelled, following an investigation into reportedly corrupt tendering processes. Although a number of contracts (worth a combined US$1.7bn) have been awarded, without the EU support, the government has little in the way of funds with which to pay for the work.
* The energy and utilities infrastructure sector continue to experience delays or suspension of key projects. In January 2012, locally based utility provider CEZ revealed that it is examining the possibility of withholding the construction of three new reactors, in addition to two planned units at Temelin nuclear plant, owing to legal restrictions. The move is likely to cut spending on the project by up to US$15bn. The Temelin expansion project has already been delayed by around two years, and there have been no assurances that the delays will not continue.
The two sub-sectors combined are estimated to have accounted for more than 66% of the country's total construction industry value in 2011. The average annual growth of 1.3% for the transport sector and 2.7% for the energy and utilities sector that we forecast between 2012 and 2016 are thus unlikely to revive the currently flagging construction sector.
A similarly bleak outlook is expected for the country's residential and non-residential segment, which we now expect to contract by 4.3% year-on-year during 2012. However, we anticipate a slow rebound in the sector, with annual average real growth of 1.6% forecast between 2013 and 2016.
Continued political squabbles and several reported cases of top-level corruption, have indeed had a detrimental effect on the Czech construction market resulting in a weak investor climate and the freezing of, much needed, EU funds. Despite Prime Minister Petr Necas' efforts in re-setting the government procedures and auditing mechanisms to stamp out corruption, following recent walk-outs from the fragile government coalition we see little progress for any major positive change in the short to medium term. That said, despite this bullish outlook, the Czech Republic stands as a relatively strong market by regional standards. The country gets a score of 60.1 out of 100 and ranks in fourth place in BMI's infrastructure risk/reward ratings for Central and Eastern Europe. However, the weak outlook for opportunities over the short term and the transport ministry's renegotiating of contracts pose significant risks to its profile.
Partial Table of Contents:
- Czech Republic Infrastructure SWOT
- Competitive Landscape
- Table: EQS Data
- Table: Cement - Price/Volume % Variances (9m10/9m11)
- Cement Forecasts
- Table: Czech Republic Cement Production and Consumption Data, 2008 - 2016
- Table: Czech Republic Cement Production and Consumption Long Term Forecasts, 2013 - 2021
Industry Forecast Scenario
- Table: Czech Republic Construction And Infrastructure Industry Data, 2008 - 2016
- Table: Czech Republic Construction And Infrastructure Long-Term Forecasts, 2013 - 2021
- Construction and Infrastructure Forecast Scenario
- Table: Czech Republic Transport Infrastructure Industry Data, 2008 - 2016
- Table: Czech Republic Transport Infrastructure Long-Term Forecasts, 2013 - 2021
- Transport Infrastructure Outlook and Overview
- Major Projects Table - Transport
- Table: Major Projects - Transport
Energy and Utilities Infrastructure
- Table: Czech Republic Energy and Utilities Infrastructure Industry Data, 2008 - 2016
- Table: Czech Republic Energy and Utilities Infrastructure Long Term Forecasts, 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: Czech Republic Residential and Non-residential Building Industry Data, 2008 - 2016
- Table: Czech Republic Residential and Non-residential Building Long-Term Forecasts, 2013 - 2021
- Residential/Non-Residential Building Outlook and Overview
- Major Projects Table - Transport
- Table: Major Project Table - Transport
- Risk/Reward Ratings
- Regional Overview
- Central and Eastern Europe Infrastructure Risk/Reward Ratings
- Table: BMI's Central and Eastern Europe Risk/Reward Ratings
- Skanska CZ
- PSJ, a.s.
- Table: BMI Infrastructure Index - YTD Top Performers (%)
- Table: BMI Infrastructure Index - YTD Worst Performers (%)
- Industry Forecasts
- Construction Industry
- Data Methodology
Full Table of Contents is available at:
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