General market conditions
Dojazd do węzła DabrowicaDespite the difficult and unstable situation on international markets and geopolitical conflicts, the past year was successful for the Polish economy. 2014 saw an acceleration of the economic growth in Poland. In accordance with the preliminary data provided by the Central Statistical Office (GUS), the gross domestic product increased, in real term, by 3.3% y/y in comparison with 1.7% in the previous year. Domestic demand had the biggest positive impact on the GDP growth (+4.6% as compared with 2013), while the impact of foreign demand was negative. In 2014, the gross added value in the national economy increased by 3.0% in comparison with 2013, as compared with an increase by 1.8% in the preceding year. The construction sector contributed significantly to this good performance, where the gross added value increased, according to preliminary estimates, by 4.7% as compared with the previous year. A positive fact was also the decrease in the unemployment rate by 1.9 percentage point from 13.4% in December 2013 to 11.5% as at the end of 2014.
Improved sentiments in the construction market were reflected by the index of general business climate in the construction industry which, while remaining negative, recorded the highest values since 2012. Without any doubt, an essential factor for future market perspectives was an increase in investments measured by gross fixed capital formation (increase by 9.4% as compared with the previous year, against 0.9% in 2013) and, in the second half of the year, acceleration in the tender awarding procedures in the road construction segment.
While in 2013 the construction and assembly production decreased by 13.6% (in current values), in 2014 this trend was reversed. The construction industry increased by 2.6% during the year and was driven mainly by the infrastructure segment, in which railway, industrial and hydro-technical construction industries played a crucial role.
Expenditures by the key investor in the roads segment, the General Directorate for National Roads and Motorways (Generalna Dyrekcja Dróg Krajowych i Autostrad – GDDKiA), decreased significantly from approx. PLN 13 billion in 2013 to approx. PLN 10.6 billion last year. Lower expenditure resulted, on the one hand, from the expiry of the European Union’s financial perspective for the years 2007–2013 and, on the other hand, from the unsatisfactory pace of signing contracts implemented under the new EU perspective.
The share of civil and water engineering facilities in the structure of construction and assembly production increased from 52.1% in 2013 to 54.0% in 2014, which occurred at the expense of non-residential construction (decrease from 34.7% to 33.3%) and residential construction (decrease from 13.2% to 12.7%).
In 2014, for a second time in a row, there was a slight decrease in the number of flats put to use, achieving the level of 143.4 thousand (decrease by 1.2% as compared with 2013). These figures, however, do not reflect the current situation in the housing construction market. Very good market economic is confirmed by the number of flats whose construction was commenced (increased by 16.3% y/y from 127.4 thousand to 148.1 thousand) and number of construction permits issued (increased by 13.0% y/y from 138.7 thousand to 156.8 thousand). The commencement of the government program called “Apartment for the Young” (Mieszkanie dla Młodych, MdM) and record-low interest rates resulting in relatively cheap financing and, at the same time, low interest rates on bank deposits contributed to a significant recovery in the development market. Due to the above factors in combination with developers’ offer adopted to preferences and purchase abilities of customers, as well as stabilisation in the housing market, 2014 must be considered probably historically best period in the development sector in terms of number of pre-sold flats.