The business climate in the construction industry IRG SGH fell by 4.8 points q / q and amounted to -7.5 points in the first quarter of 2022, and increased by 5.3 points in annual terms, informed the Institute of Economic Development of the Warsaw School of Economics (IRG SGH).
In the first quarter of 2022, the business climate index in the construction industry IRG SGH (IRGCON) has a negative value, -7.5 points, therefore it is 4.8 points lower than in the fourth quarter of 2021. The decrease is seasonal. Compared to the first quarter of 2021 The value of the indicator is higher by 5.3 points, and with the first quarter of 2020 by 3.5 points. The value of the balance of answers to the question about the production volume is -30.7 points. It is 11.9 points higher than in the previous year High annual growth was recorded for both ownership sectors: by 11.8 points for private companies and 14.1 points for public enterprises, according to the report.
The current quarter is another quarter of an increase in the prices of construction services. The current price level is 41.5 points. Compared to the first quarter of last year. the balance is 51.8 points higher. A further increase in the prices of construction services in the second one should be expected quarter of the year. The total value of the forecast balance is 57.9 points, 57.7 points for the private sector and 61.7 points for the public sector. As in the previous quarters, the majority of construction companies assess their own financial situation as unfavorable. The value of the balance is -23.8 points, for the private sector -21.2 points, and for the public sector – 42 points. Large companies with more than 100 employees and companies engaged in the construction of buildings (PKD41 group), for which the balance is -8.9 and -10.7 points, are the best assessed by the Institute.
The level of investment outlays in construction is still low; the value of the balance is -16.7 points in total, -14.6 points for the private sector and -27.2 points for the public sector. According to IRG SGH, however, it is worth noting that compared to the previous quarter, the total balance is higher by 5.0 points, and compared to the first quarter of a year ago, higher by 10.1 points. Investment outlays in construction are expected to increase in the next quarter.
Construction companies still assess the current economic situation in the country as unfavorable. The total balance has a very low, negative value, -67.1 points. Public companies evaluate the economy worse than private companies. In these groups, the balance values are equal to -68.8 and -56.8 points, respectively.
The respondents assess the situation in their own sector better. The current value of the balance is -37.4 points. Public enterprises evaluate the condition of the construction sector much worse than private companies (the balance values are respectively: -58.1 and -35.7 points).
As in the fourth quarter of 2021, the participants of the economic situation survey (69.8% of respondents) considered high prices of raw materials and materials to be the main barrier to the development of construction activity. They further mention: unstable law (56.3% now, 43.4% in the previous quarter) and excessive tax burdens (47% now, 44.2% previously).
Source: IRG SGH and ISBnews
