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Spending on Polish construction set to grow

6 Feb 15 Forecasts for the Polish construction industry are increasingly optimistic according to the country’s Ministry of Treasury.

Output began to rise in 2014
Output began to rise in 2014

The Polish construction sector is slowly leaving the economic crisis behind and while forecasts for builders are promising. Growth will likely be driven in the next few years by EU funds invested in infrastructure and residential construction, said the ministry.

The construction market should grow by 6.8% in 2015, predicts a new by financial institution Coface. Poland may spend PLN500bn (£89bn) on infrastructure by 2020.

“The EU new budget will provide a significant support for infrastructure, estimated at PLN103bn,” said Coface in the report. “However, infrastructural investments will be much higher thanks to own means. Total spending on infrastructure by 2020 is estimated at PLN500 bln or some 30% of Poland's annual GDP.”

Roads will account for the biggest share of infrastructure expenditureswith a budget estimated at about PLN95bn. Polish road investment should peak in 2016-2018 at PLN19-23bn per year.

Residential construction will likely constitute the other driver of the industry as low costs of obtaining financing are an incentive for households to borrow, Coface analysts said.

In addition, the relatively warm winter 2014/15 has an advantageous influence on the industry as it has not brought about noticeable delays on construction sites.

A report by Deloitte, presented in mid-October last year, indicates that a broader implementation of public-private partnership (PPP) provide opportunities for stable development of the construction sector in Poland.

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MPU
MPU

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