Posted by: Hidde van Erp Posted on: Friday 06 August 2010, 10:45

In June 2010 the general market climate indicator for the construction industry increased relative to May by 0.6 points, to 2.0 points. It was higher relative to June 2009 (by 10 points) but lower relative to the analogous month of the previous three years. The assessments of the current order portfolio, construction and assembly output as well as the financial situations of the construction companies have improved in June, as compared to the previous month. Forecasts pertaining to order portfolio and construction output are less upbeat than those of May 2010. Predictions with regard to the financial situations of the firms remain unchanged and optimistic.

In June 2010, 3.7% of respondents said they encounter no barriers to engaging in business on the Polish construction market, in May 2010 the percentage share of such respondents had stood at 3.9%, and in June 2009 – 4.3%. The greatest difficulties experienced by construction firms related to the competition of other firms (58% of the respondents in June and 61% in May 2010, whereas the proportion stood at 62% in June 2009), the cost of labour (51% in June and 50.5% in May 2010 against 50% in June 2009) and the insufficient demand (44% in June and 46% in May 2010, relative to 49% a year before). In comparison with June 2009, the significance of the weather conditions as a barrier increased (33% in June 2010 compared to 23% in May and 13% in June 2009). The most significant decline was reported for the insufficient demand.

The economic situation of the construction and assembly companies in June 2010 was assessed pessimistically but better than a month before. Only the largest companies (over 250 employees) were upbeat, while the most pessimistic assessments were reported for the small units (up to 49 workers). The order portfolio value was slightly growing in June 2010 and large and medium-sized companies (over 50 employees) have reported increases, while the smallest companies were experiencing declines. The construction and assembly output was growing slightly in June. Large and medium-sized companies also reported growth, but small enterprises have seen decline. Companies of all sizes were less pessimistic about their current financial situations with the largest firms being those that reported the best assessments.Firms of all sizes reported that the payment delays were increasing. The most significant delays were experienced by small companies.

The forecasts regarding the three subsequent months were optimistic but more conservative than those of May 2010. The most optimistic were the largest companies. The companies expected the order portfolio to grow to a lesser extent than they did in May, with the largest increase being predicted by the large firms. Also, the construction companies forecast that the construction and assembly output will grow over the next three months to a similar extent as that predicted a month before and, again, the most upbeat are the largest firms. This also holds true with regard to the financial standing of the companies during the next three months, with the most upbeat being the medium-sized firms. As far as the prices of the construction and assembly works are concerned, construction companies expect a further decline. The largest decrease is predicted by the small firms (up to 49 employees) but the managers of the largest companies expect an increase.

Source:

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