PAB - POLISH CONSTRUCTION RESEARCH & FORECASTING is a private scientific and research institute specialising in economic analysis of the construction industry. PAB was established in 2000 by specialists with more than 25 years of experience in activity within the construction industry.
PAB-PCR&F Institute - Polish Partner of Euroconstruct network.
The strong development of construction in Poland, observed since Poland's accession to the EU in 2004, has been attributed mainly to the implementation of the large infrastructure projects within civil engineering construction, whose development is stimulated and financed to a large extent from EU cohesion funds.
In the years 2005-2011 the value of new civil engineering construction increased more than threefold, when residential construction increased by only 70%, i.e. 3x lower, and non-residential construction increased by only 55%. i.e. 4x lower.
The support from EU public investment funds was decisive for the development of construction in Poland, whose total cumulative increase in these years was 83%. As a result, in 2011 comparing to 2004, the share of civil engineering construction in the total structure of construction production in Poland increased by 15 percent points from 23% to 38%, while the share of non-residential and residential construction decreased by 11 percent points and 4 percent points, respectively.
In the construction sector, the main beneficiaries of EU funds were medium and large civil engineering construction companies, which accounted for 60% in the structure of construction works in 2011 completed by construction enterprises with more than 9 employees.
After 2012, public investments, mainly infrastructure financed largely from EU cohesion funds, were hindered as a result of a smaller scale of implementation of projects financed from EU funds towards the end of the EU budgetary perspective for 2007-2013 and much weaker than expected absorption of funds from the next perspective for the years 2014-2020.
The slowdown in financing public domestic investments was accompanied by a regression in local construction, as many of the projects already developed had to be changed and adapted to the new regulations, including new environmental impact assessments, and therefore their implementation is delayed.
The delay in contracting completed construction projects was also caused by the changes in the public procurement law.
The regression and long delays in financing the construction of civil engineering structures occurred not only in Poland, but in all post-communist EU countries in 2016.
The decline in public investment was accompanied by weakening growth in non-housing construction, which is a mix of public and private investments.
As a result, in the years 2012-2017 the value of civil engineering construction decreased by 25% and its share in the total structure of construction production made in Poland decreased by 10 percent points from 38% to 28%, with the increase in the share of residential construction by 8 percent points to 32% (the share of non-residential construction increased by 2 percent points).
By contrast, the share of civil engineering decreased by 9.5 percent point to 50.3% in the structure of construction works completed by the companies with at least 9 employees in 2017.
Against the background of the double-digit decline in engineering construction and stagnation in non-residential construction - housing construction was preferred, in which production increased in 2017 by 39% in comparison to 2011.
The double-digit growth in housing construction not directly benefiting from the financing of EU funds has allowed to curb the strong downward trend in Polish construction in 2011-2017, whose total cumulative increase in these years amounted to 6%.
The main factors for strong development of the housing construction in Poland are favorable internal financial conditions (very low mortgage rates, increase in population incomes) of construction and purchase of housing supported by governmental programs only to a small extent dependent on EU funding.
In the subsequent years, with the increase in absorption of EU funds from the new perspective 2014-2020, there will be a corresponding increase in the public investments, mainly infrastructure, which will again become the main driving motor construction in Poland (from 2018).
However, the strong upward trends in the number of building permits and housing starts issued in several previous years have created strong foundations for maintaining a high level of housing construction by 2020 and its share in the total construction output in Poland.
This is supported by the intense governmental actions aimed at accelerating the socially important "Flat Plus"program, which will be not only a program for providing housing for the needy, but will also drive the Polish economy. Ultimately, it will be a large investment program that can mobilize up to PLN 200 billion for investments by 2030.
As a part of these activities, the so-called "housing special act" is now developed, that will definitely accelerate the construction of housing in Poland and remove bureaucratic barriers, but also those barriers that are associated with the preparatory process for construction.
According to the governmental assumptions, the act is to be approved in the first half of 2018 in order to allow for the construction of 100,000 new flats by next year.