Bankruptcies in construction industry on the rise

The number of bankruptcies in the construction sector in Poland has recently increased, with local companies with turnovers of less than PLN 100 million having been hit by a decrease in construction production, said a recent report by the credit insurance company Euler Hermes. According to the study, 21 construction companies went bankrupt in November this year, compared to 12 in November 2015. The total number of bankruptcies in the Polish economy stood at 73 last month. The recent troubles of construction companies have mainly been the result of a weaker season – in October construction production decreased by 20.1 percent y/y. Even the largest builders have been bidding for local contracts, often winning them at the expense of locally active companies. The bankruptcies in the construction sector affected both companies that specialize in the construction of buildings and those that specialize in the construction of infrastructure projects, said Tomasz Starus, a member of the management board at Euler Hermes.

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