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The Warsaw Voice » Business » March 21, 2018
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Construction bubble over Poland?
March 21, 2018   
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Poland's latest construction output data may signal a bubble forming in the segment, PKO BP chief economist Piotr Bujak says in a comment to the February data. A very strong increase in demand for construction services is coupled with supply limitations, linked to staff shortage as well as labor and materials costs increase, while prices for construction works are rising only very slowly. February construction output growth of over 30% year on year was driven above all by infrastructural construction which surged by over 60% year on year, while in housing construction the growth rate decelerated to 12% from nearly 40% in January, DM BOS economists point out. Construction output growth should remain high in the coming months, considering the current rate of signing agreements for EU co-financed projects, they believe. BZ WBK economists expect a future decline versus February growth rate considering the production limitations of the segment. The housing segment, currently benefiting from record-high demand for apartments, may face signals of a speculative bubble in 2-3 years, considering land bank limitations for developers, Bujak also notes.
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