Central European Construction Market Report 1Q 2023
Poland
Gross domestic product
Poland’s 3Q 2022 gross domestic product (GDP) underperformed compared to 2Q results, becoming the second continuous quarter with declining GDP for the year.
The Consumer Price Index (CPI) remained high, above the European Union (EU) average, but November and December revealed lower figures perhaps marking the start of the much-awaited easing of inflation rates.
As with many EU countries, Poland has strived to achieve energy independence from Russian-supplied fuels. The recent mild winter conditions have eased fears, possibly bringing stability to inflation for 2Q 2023. Forecasters are now focusing on the coming winter at the end of 2023.
Construction materials
The industrial price index graph reveals which production prices have recently decreased, including sawn wood, glass, concrete, iron, wiring and lighting equipment.
Gleeds materials price table has been updated:
Impact
The above has considerably influenced the 18–22% increase in overall construction costs that Gleeds has calculated when analysing tenders, contracts and claims received in the past year, based on 4Q 2021 conditions.
Contracts
There is a significant decrease in the number of large tenders on the market, resulting in more contractors bidding for work. Due to current volatility, offers have short validity periods and contracts contain price review clauses. Contractors are anxiously awaiting public works tenders under the EU Recovery plan to stabilise the local economy.
Market outlook
The general construction confidence indicator for the biggest enterprises surveyed revealed that large scale projects have remained steady, while smaller operators maintain a decline in confidence.
Labour availability in Poland continues to be an issue and material and equipment prices, after stabilising mid-year, fell in 4Q 2022.
Respondents to the recent Statistics Poland construction survey continue to report an expectation of declining prices over the next quarter.
Gleeds recommends revising previously set budgets to reflect current market trends.
Nobu Hotel, Warsaw, Poland — Gleeds provided Project Management/Cost Management/Quality/Construction Supervision/LEED Certification and Consultancy for this project.
