Construction sector in Bulgaria to grow 5% in 2013

The civil engineering construction market will continue to dominate the overall construction market in Bulgaria. With access to EU funds and the attractive energy sector as leading factors in the development of civil engineering projects, the outlook for Bulgaria’s overall construction market is positive.
According to PMR’s latest report, entitled “Construction sector in Bulgaria 2013 – Development forecasts for 2013-2015”, the medium-term outlook for the Bulgarian construction market is quite optimistic and one of the best in the region. The research company found that, despite the risks associated with the relatively strong links between the Greek and Bulgarian economies, in particular in the financial sphere, the Bulgarian economy remained quite resilient in 2012. As a result, the risk of recession is low and GDP growth should accelerate in 2013.
The report also shows that the construction sector is expected to grow more rapidly in the coming years, driven not only by the expected further increase EU-financed public projects, but also by a revival of investment activity in the private sector. Currently, building construction is more than 60% lower than in 2008 and even lower than in 2005. It means that in the coming years construction sector output should go up by more than an estimated 1% annual increase in 2012.
Bulgaria’s construction market prospects are becoming increasingly positive as the stabilisation phase, after the global economic crisis, appears to be ending, most probably already in 2013. Although small growth is expected for 2013-2015, the overall prospects for the development of Bulgaria’s construction market are positive, as potential is still very high.

In terms of the specific sectors, civil engineering will lead the way in construction market improvements. With the increased EU funds available through Operational Programmes, civil engineering’s revival has had a very positive effect on the construction market. A number of projects have progressed significantly in road and railway infrastructure as well as a number of environmental protection-related construction projects.
The residential construction market is still in a far worse condition compared to non-residential building and civil engineering. Yet, it too showed signs of achieving market equilibrium during 2012, with the first price growth on the residential real estate market noted after more than five years of continuous fall. The situation on the non-residential construction market has improved slightly in 2012, compared to 2011, mostly in construction of industrial buildings and the revival of the retail space construction, mostly shopping malls.
However, residential construction is still far from achieving growth, but it seems on the road to recovery and stability in the segment is expected as soon as 2013, with a chance for small growth in 2014 and in 2015, due to increased demand for high quality residential dwellings in attractive locations. Access to mortgage loans and still high interest rates are among the key factors driving the development of new residential projects, which are now mostly small size high quality buildings, rather than the previously popular large multi-family residential complexes.
Source: pmr