It seems that it goes better in the construction industry in Poland. The data on the May construction and assembly production in Poland positively surprised economists, but they point out that the economic situation in the sector is deteriorating, e.g. due to increases in interest rates.
Construction industry employing more people
According to preliminary data, construction and assembly production in constant prices in Poland by construction companies employing more than 9 people was higher by 13% in May compared to the same period last year , the Central Statistical Office reported. The market consensus predicted an increase of 8.5% after 9.3% recorded in April. After eliminating the influence of seasonal factors, the annual dynamics amounted to 9.8%.
“Sales of construction and assembly production increased in all construction departments compared to May 2021, while in enterprises dealing with the construction of buildings – by 34.7% , in units specialising in civil engineering – by 3.9 %, while in entities carrying out specialist construction works – by 3.3% “- informs the Central Statistical Office.
Increase in renovation works
Impressive dynamics were recorded in the case of renovation works (28.7%), investments grew significantly slower (3.6%).
Compared to April, construction and assembly production increased by 14.2%, and after seasonally adjusted by 2.4%.
The seasonally adjusted data is the focus of mBank’s analysts. “Although zigzagging, we are going down and this is not the last word, but a prelude to deeper braking” – comment on Twitter.
In turn, the economists of PKO BP note that the economic situation on the market is deteriorating due to the increase in interest rates and construction costs. “Despite the high annual dynamics in the building construction segment, the value of the works performed has been falling for several months”, they indicate.
“The monthly housing market indicators also indicate the slowdown – the number of building permits remains below the medium-term average, and the number of started construction projects has dropped significantly. Only flats delivered for use are growing rapidly, but this is a delayed indicator”, they add.
“The data turned out to be better than expected, but the prospects for the construction sector are negative due to the weakening demand for apartments due to the increased uncertainty and the growing cost of credit. The industry is also struggling with high prices of materials and staff shortages” – comments Adam Antoniak from ING .
Recovery in activity will be limited
“The high sales dynamics in the” building construction “category (34.7% against 20.5%) reflects, in our opinion, the continuation of private investments, especially in housing, which were started in the previous quarters,” says Jakub Borowski from Credit Agricole.
“We still expect that in the coming months the recovery in construction activity will be limited by increasing supply barriers (lack of qualified workers and strong growth of building materials) and demand barriers (reduced availability of housing loans ) and a decline in cash demand for housing due to the uncertainty accompanying the war in Ukraine). Such an assessment is supported by the seasonally adjusted GUS business climate index showing the current portfolio of domestic orders in construction, which was formed in April this year. at the lowest level since April 2021 “- he adds.