In 2020, Poland’s GDP stood at PLN 2,091.3 billion (EUR 460.1 billion), representing a 2.7% decline compared to 2019 and a 34.3% growth over the 2010-2020 period.
The number of enterprises in the broad construction sector increased by 51.4%, from 341,953 in 2010 to 517,818 in 2020. This increase was driven by all the sub-sectors including the real estate activities (+99.8%), architectural and engineering activities (+64.7%), narrow construction (+43.0%) and manufacturing (+35.0%) sub-sectors over the 2010 2020 period.
Similarly, the volume index of production in the broad construction sector increased by 16.4% between 2015 and 2020, mainly driven by the construction of civil engineering (+28.1%) and construction of buildings (+8.8%).
Volume index of production in the broad construction sector between 2015 and 2020 16.4%
The total turnover of the broad construction sector reached EUR 144.4 billion in 2020, registering an increase of 58.3% compared to 2010 levels (EUR 96.7 billion). With regards to sub sectors, the real estate activities exhibited the largest growth in terms of turnover, being 91.1%, followed by the manufacturing (+85.7%), architectural and engineering activities (+59.1%) and the narrow construction (+42.8%) sub-sectors over the 2010 2020 period.
With regards to employment, in 2020, there were 1,727,266 persons employed in the broad construction sector in Poland, an increase of 20.9% since 2010 (1,428,900 people). All the sub-sectors registered growth in terms of persons employed in the broad sector between 2010 and 2020, with the largest increase being in the real estate activities (+46.4%) sub sector. This was followed by the architectural and engineering activities (+36.9%), manufacturing (+27.3%) and narrow construction (+12.4%) sub-sectors, during the same period.
The Polish government introduced several initiatives to promote the residential housing market. In May 2021, the government announced that they are currently developing tailored mechanisms or instruments to meet the housing requirements of the Poles. These instruments include housing vouchers and the government guarantee scheme for mortgage repayments for purchasing or renting a flat – both for married couples and singles.
The Polish government is also developing a programme designed for persons with credit standing who do not have the savings to cover the capital required by banks.
The initial projections state that the guarantee will be awarded up to the amount of 40% of the total value of the flat in the case of a purchase without own contribution, both on the primary and secondary market.
Furthermore, in September 2020, the EIB provided EUR 20 million for financing the construction and renovation of 250 social and affordable housing units in Szczecin, Poland. The project forms part of the larger urban regeneration programme of the historic part of the city and places a main focus on ensuring energy-efficiency.
With regards to non-residential and infrastructure construction, the National Road and Motorway Construction Programme 2014-2023 (Program Budowy Dróg i Autostrad) envisages building 3,263 kilometres of roads. The initial budget of the Programme was PLN 107.1 billion, but it was increased to PLN 142.2 billion at the beginning of 3Q 2019 . Moreover, the Polish government, in June 2021, announced plans to invest PLN 200 billion (EUR 44.0 billion) in rail and road infrastructure under the country’s Polish New Deal plan to stimulate recovery following the COVID-19 pandemic.
Under its 2021 2026 Recovery and Resilience Plan (RRP), Poland has been allotted about EUR 36.0 billion in total, comprising EUR 23.9 billion in grants and EUR 12.1 billion in loans. Out of this, Poland has allocated around EUR 7.0 billion towards building related activities .
In particular, more than half of the building funding (around EUR 3.9 billion) has been allocated for building renovation related activities . Also, Poland has allocated a substantial support towards improving the country’s infrastructure, with a planned investment of around EUR 2.4 billion. This consists of the modernisation of railway lines including carrying out works under individual projects for around 478 kilometres of railway lines by August 2026, including over 300 km on the TEN-T network (of which 200 km on the core network) . Given its significant environmental impact and ability to revive the overall economic recovery process, adversely impacted by the COVID-19, the construction sector could significantly benefit from the investments of the country’s RRP.
Currently, the Polish construction sector faces a few issues. First, the country is also facing a shortage of skilled labour workforce. This issue is further strengthened by the significant gap between demand of training from businesses and training supply in Poland. In this regard, the government introduced several measures to tackle this issue by changing the provision of education and introducing new forms of teaching and learning . Second, the development of the Polish construction sector is also impeded by the rise of cases of late payment. As per the Atradius Payment Practices Barometer 2020 report, the COVID-19 pandemic-induced economic crisis led to an average 76% increase in late payments in the country. In addition, squeezing liquidity is the main reason for Polish businesses to withhold payment to their suppliers
Overall, the Polish construction sector has a positive outlook in the medium and long term. The sector is primarily expected to be driven by public road and railway infrastructure investment projects undertaken by the largest public investors, further supported by EU backed funding.