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Changes in the Polish construction chemicals market

After an average annual increase of 14% between 2004 and 2008, the construction chemicals market in Poland will shrink in the upcoming years due to lower economic growth, decline in the number of homes under construction and a weakening non-residential sector. The market will start to recover no sooner than in 2011.
After excellent 2004-2008, a much slower development of the Polish economy as well as drying up financial sources for buildings projects, especially in the residential sector, will give a rise to a certain correction in the Polish construction chemicals market between 2009 and 2011. In its latest report “Construction chemicals market in Poland 2009. Development forecasts for 2009-2011”, the research and consulting company PMR estimates that in 2009-2011 market’s average annual rate of change, measured in sales value, will equal -5%. The market will report the steepest declines in 2010.
The survey conducted for the needs of the report among 56 manufacturers of construction chemicals shows that currently there are two key impediments to the industry: fierce competition in the market and hampered access to investment credits. Additionally, hindrances which will be gaining in significance during the upcoming year or so include: insufficient demand and payment backlogs.
Furthermore, PMR estimates that as a result of strong price competition in the construction market, investors will be looking for lower-cost and simpler solutions to the detriment of more expensive and complex solutions more frequently.
According to PMR’s analysts, in 2009 the construction chemicals market will not suffer greater declines owing to housing units commenced before the collapse, during the construction boom. “We expect at least 170,000 flats to be completed this year. As usually, new homes will peak in December. Their buyers will still be putting finishing touches to a great number of these flats in 2010, generating an additional demand for construction chemicals,” says Bartlomiej Sosna, Senior Construction Analyst at PMR and one of the authors of the report.
However, already in 2009 present drops in the number of housing units commenced will be reflected in weaker results of the construction chemicals companies. “We predict that in the entire 2009, the total number of housing starts will reach approximately 140,000, which will represent a steep fall of nearly 20% in comparison with 2008. Thus, the market will stabilize at the 2006 level when the construction of 138,000 new flats was commenced,” adds Bartlomiej Sosna.
Admittedly, the civil engineering construction records an upturn, which – to a certain degree – will compensate for the loss in the construction of buildings. Nevertheless, this will concern only a number of companies operating in the construction chemicals market, namely those offering chemicals used for modernising and constructing bridges as well as other civil engineering structures, such as stadiums or complex industrial edifices.
The condition of the construction chemicals market could undoubtedly be enhanced by investments in new public utilities. “We expect that constructing and further expanding schools, university campuses, libraries, sports halls, swimming pools, hospitals, museums or civil administration offices will be the most dynamically developing arm of the non-residential sector and, to a large extent, will compensate for the loss in the property developing residential construction,” says Bartlomiej Sosna.
The condition of the construction chemicals market may improve to a certain degree, however, no sooner than in 2011. In addition, this depends on banks’ credit policy in the second half of 2009.

This press release is based on information contained in the latest PMR report entitled “Construction chemicals market in Poland 2009. Development forecasts for 2009-2011”.

For more information on the report please contact:
Marketing Department:
tel. /48/ 12 618 90 00
e-mail: marketing@pmrcorporate.com

About PMR

PMR Publications (www.pmrpublications.com) is a division of PMR, a company providing market information, advice and services to international businesses interested in Central and Eastern European countries and other emerging markets. PMR key areas of operation include market research (through PMR Research), consultancy (through PMR Consulting) and business publications (through PMR Publications). With over 13 years of experience, highly skilled international staff and coverage of over 20 countries, PMR is one of the largest companies of its type in the region.

PMR
ul. Supniewskiego 9, 31-527 Krakow, Poland
tel. /48/ 12 618 90 00, fax /48/ 12 618 90 08
www.pmrcorporate.com

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