Construction activity in Eastern Europe to ‘weaken slightly’ in 2022
By Catrin Jones06 June 2022
GlobalData anticipates that construction activity in Eastern Europe will weaken slightly in 2022 due to strong inflationary pressures and weak investor confidence.
The data and analytics company has downgraded its growth forecast for construction output in Eastern Europe (excluding Ukraine and Russia) in 2022 from 4.1% to 1.5%.
GlobalData noted that the increasing strength of headwinds and downside risks, such as raw material cost inflation and weakening investor confidence owing to the conflict in Ukraine, are expected to remain pertinent until at least 2023.
Joel Hanna, an economist at GlobalData, comments, “Construction output data for March, the first release since Russia’s invasion of Ukraine, shows that output in the region weakened slightly, but the initial impact of the war on investor confidence, currency values, and the health of the project pipeline was not severe. However, the impact of the war on macroeconomic conditions is likely to intensify over the remainder of the year, causing significant disruption to the industry.”
It was reported that there were month-on-month contractions in Hungary and the Czech Republic of 5.7% and 3.7%, respectively, while Romania and Slovakia recorded marginal contractions. Bulgaria and Poland managed to record a positive outturn, with output growing by 7.2% and 3.6%.
GlobalData’s Construction Project Momentum Index showed an improvement in the health of the project pipeline in April following a severe downturn in the rate of progress on projects in the pre-execution phase in March. However, the full extent of the pressures on the industry may yet be realised says GlobalData.