Figures released by the Polish Cement & Lime Association show that cement deliveries in April were in excess of 1.5m tonnes and 71% higher than during the same month last year. This comes on top of a 50% increase in cement sales during the January to March period. A less severe winter certainly helped the first quarter volumes and there appears also to be some underlying improvement in construction activity, but the main impact behind the sharp rise in the cement tonnage, certainly during April, is to be found in the increase in the rate of value added tax from the first of May to coincide with Poland joining the European Union.
The rate on building materials went up with the beginning of May from 7% to 22% and certainly brought forward purchases of cement. Residential new building and renovation work is also being subject to higher rates of VAT at the same time. Turnover in the construction industry, according to the Polish statistical office, rose by 26% April on April, or by 19.9% when adjusting for the number of working days. In spite of the higher rate of activity, price inflation was just 1.5% on an annual basis at the end of March.