Construction is the third industry in terms of total arrears after trade and industry. At the end of June, construction companies had unpaid invoices reported to the BIG InfoMonitor debtors register and loan instalments delayed by min. 30 days delayed loan instalments for a total of PLN 6.19 billion, according to data from BIG InfoMonitor and the credit information database BIK. The years 2021 and 2022 proved to be a particularly difficult period for the industry, with a total of more than PLN 1 billion in unpaid instalments and invoices.
The number of active, suspended and closed companies with repayment problems approached 50,300. In the months to June 2023, 1,840 new unreliable payers arrived in the BIG InfoMonitor and BIK databases, but their percentage in the industry decreased from 5.1 to 5%. This is due to the fact that new business continues to emerge in the sector – despite difficult times, it was reported.
“Of the construction industry’s almost PLN 6.2 billion in unpaid credit and non-credit liabilities, the largest amount is attributable to companies involved in works related to the construction of buildings (PKD 41) – PLN 3.82 billion. Specialised construction works (PKD 43) is affected by PLN 1.4 billion of arrears. Overdue loans and invoices of the division Civil engineering works, i.e. roads and railways, bridges, tunnels or pipelines (PKD 42) amount to less than PLN 1 billion,” – reads the release.
The current scale of the construction industry’s problems with settlements is largely a problem for companies involved in construction work related to the erection of buildings. In one year they have increased their outstanding debt by almost 22%. They also gained 381 unpaid debtors. As a result, 2022 resulted in a reduction in the number of new developments by around one-third, with developers starting construction on 50,000 fewer flats than the year before, it stressed.
“The fate of the specialised construction works business (PKD Division 43) largely depends on how companies involved in the erection of buildings perform. For entrepreneurs focused on ‘finishing work’ and work such as preparing land for construction or carrying out electrical and plumbing installations, a lack of new construction means a lack of new orders. Suffice it to say that, for example, the backlog of electrical contractors has risen by more than 40% in one year and by 24% in the last six months and today amounts to PLN 239 million. Flooring, wallpapering and wall facing increased overdue debts by 29 and 16% respectively to PLN 76 million. According to data from BIG InfoMonitor’s Debtor Register and BIK, the total overdue debt of specialist building work in June 2023 amounted to more than PLN 1.4 billion, which was 17% more than in June 2022. Overdue payers increased by 1,290 during this period. In contrast to the situation in companies constructing buildings, no slowdown in the growth of arrears can be seen here for the time being. In the first half of this year, just like in the second half of last year, there was an increase of around PLN 100 million in unpaid liabilities on their account”. – we read further.
“We can assume that the ‘First Home’ programme will help in the long term. The programme will stimulate demand for housing loans and thus for real estate. We estimate that one-third of lending in the second half of the year will be accounted for by loans granted precisely under this project. Some of the loans will finance the purchase of property on the primary market from a developer, some on the secondary market and some for self-build. In all three situations, this will increase the demand for the services of construction companies from the various construction divisions. This is very good news for the sector, but it will take some time for the changes to take place. The involvement in the construction of logistics centres and warehouse halls is also an opportunity.” – BIG InfoMonitor chief analyst Waldemar Rogowski stressed, quoted in the material.
By far the best performers are entrepreneurs performing works related to the construction of civil engineering structures (PKD Division 42). There, the amount of liabilities not paid on time has decreased over the last 12 months and amounted to PLN 957 million in June 2023. In the same period last year, it was almost PLN 1.2 billion. The decrease – compared to other entities in the sector – is therefore quite significant.
