Polish construction

The Polish government statistics agency GUS released its July survey on the construction market prospects. The industry outlook has improved for 28 per cent of the companies surveyed while 16 per cent of companies reported that market conditions have deteriorated. The balance felt there was no change. The public sector projects seem to be on the rebound as companies reported increased demand in that part of the market.

Most of the surveyed companies predict better results for the next three months. Prices in the sector will continue to rise. The number of companies declaring production overcapacity remains at 22%, while 69% claim that their capacity is well suited to the current market situation.

The news should be positive for Wienerberger, Ferrovial and to a lesser extent HeidelbergCement as all have exposure in the Polish market. Deutsche Bank analysts previously worried about the Polish market after a sharp increase in VAT in May (from 7% to 22%) and after interest rates were increased. However the market seems to be performing rather well.