Building on optimism

Poland's construction industry showed 17.5-percent growth in the first quarter of 2008, recording the highest growth rate among all sectors of the economy for the period. The result comes after relatively poor growth indicators in the second half of 2007 and could portend even higher growth for the whole year.

But according to Zofia Bolkowska, a construction industry expert, market representatives are making cautious predictions for growth in 2008, ranging from 13 to 15 percent. "Construction is a very unpredictable industry and everything could still change," said Bolkowska. "If the predictions come true, however, that would be a failure since the huge needs related to the organization of the Euro 2012 soccer championships require growth of at least 25 percent," she added.

Among the factors contributing to the growing demand for construction were the increase in domestic and foreign investments, development of infrastructure resulting from the inflow of European Union funds as well as high profitability recorded in the industry in recent years.

Admittedly, barriers hindering growth for the Polish construction industry persisted, but proved less acute in Q1 2008 than in preceding quarters. These included the growing prices of construction materials as well as construction firms' problems with finding staff. The shortage of construction workers, estimated in mid-2007 at between 120,000 and 150,000 people, has ameliorated somewhat. At the same time, the industry saw a sharp rise in remunerations, higher than in other economic sectors, with the average monthly salary in March amounting to zł.3,155.

"The rise in salaries in the Polish construction industry, although considerable, is not high enough to encourage [Poles] to return from economic emigration, but it may combat the desire to leave," said Bolkowska.