Bulgarian construction sector is still lagging behind
In 2011, GDP of Bulgaria is anticipated to record a surge of 2-2.5%. Compared to the overall economy, the Bulgarian construction sector is still lagging behind in revival. This is reported in the actual market report by Buildecon. In 2011, growth rate is to be negative for the third year in a row. The pace of reduction is slower than in 2010 and in 2009, and the bottom is to be hit in 2011 at around € 7bln for construction output (at current price) and the sector is to start to rebound in 2012. In 2012, the share of civil-engineering is to exceed 50% of the total output.
Leading segments would again be road construction, due to the large-scale infrastructural projects financed through the EU Programs and renovation initiatives funded by municipalities. In the period of 2012-2013, civil engineering is to compensate the downturn of the other two sub-sectors since for these two years the government is planning the highest absorption rates in EU funding. Residential construction might be triggered only by certain renovation activities in 2012-2013, while the leading segment in non-residential construction is to be industrial construction.
In the residential sub-sector a certain trend of alteration of building types occurred during the crisis years – massive multi-family complexes give way to individual small–scale projects. Investors were pressed by low demand and difficulties in finding financial resources. Homebuyers were attracted by decreasing property prices, but at the same time, they were stopped by the economic uncertainty and the risk of losing future incomes.
Non-residential construction saw an unstable year as well. No major projects reached completion in H1 2011, especially in the three so far leading segments: commercial, office and hotel constructions. Nevertheless, forecasts for the years 2012 and 2013 in terms of shopping centers are more optimistic with a number of new malls to be completed. Existing properties are characterized by higher vacancy rates and dropping rent levels, which might restrain eventual future investment incentives. As a result of the postponed modernization and the available EU support, the upcoming period is to experience growing activity in the field of industrial and agriculture-related constructions.
Source: Property-Magazine.eu