The successive months of 2008 show that the present high growth in construction can be sustained provided that barriers hampering the sector are gradually removed.
Growth in the construction industry depends on investment and demand. Investment in the branch is currently high due to its high earnings, which enable builders to finance development projects. Also aiding the industry are EU and foreign investor funds
In 2007 the construction sector suffered under a shortage of skilled personnel, thanks to which its growth, although quite high, was below expecations. As in previous years, in 2008 the construction industry continued to develop faster than other branches, each month bringing a further rise in its growth pace. In January production was 6.8% up on January 2007, with February’s figure topping February 2007 by 20.7% and a respectively 16.3%, 23%, 16.6% and 20.9% year-on-year rise in March, April, May and June. By mid-year, production in the construction branch had risen 18.2%. Growth was visible in all sectors of the branch, especially in companies specialising in preparing construction sites (45%), and civil engineering units (almost 20%). Also on the rise was housing, with 28% more homes built over the first six months of 2008 than over the same period of 2007. Nonetheless, housing growth over the past two months was not as high as in earlier months. A worrying sign is a fall in home permits and starts. This shows that earlier predictions that 2008 would see the largest number of homes built since 1990 may have been over-optimistic.
The employment barriers traditionally hampering the Polish construction industry are gradually disappearing. Between January and May 2008 average employment in the branch was 10.8% above the previous year with gross monthly wages 16.8% higher. Wages in the construction industry are growing faster than in any other branch and have for some months now been well above the corporate sector’s average. This is a result of wage pressure caused by staff problems. Builders are making good money and appear to have sufficient funds for wages, although the wage growth pace has slowed down slightly over the past two months.

General economic surveys show that builders are optimistic. The branch’s assessments for June 2008 were positive and showed an improvement on the previous month, although some observers advocated caution
In June, 33% of the polled builders reported an improvement in business conditions and 6% noted a worsening. Production in the sector rose faster than in preceding months, as did orders, although expecations for the coming three months were rather low. As last year, 32% expect to work abroad and predict that their foreign orders will remain at last year’s level. The current financial situation is viewed as positive. Over the next three months builders expected prices in the branch to rise at a slower pace than now, they also predicted a rise in employment.
In all, 4.1% of the examined builders declared no work hindrances in June 2008. Among the still-felt barriers are employment costs (59%), skill shortages (55%), competition (54%) and material costs (39%). Notably, June is the third consecutive month in which employment is not listed as the branch’s biggest hindrance. Against June 2007, competition gained most and material costs and equipment shortages lost most (19 to 6%) in importance as a business barrier in the construction industry.
Some 7% of builders declared their production capacity as too big, 78% as sufficient, and 15% as insufficient. According to builders, in June 2008 capacity utilisation stood at 86%.