Fewer construction starts – changes in the precast concrete market
Recent months have brought great uncertainty to the construction market. All analyses and plans prepared in companies involved in the construction industry must take into account factors that currently have impact on the market: the war in Ukraine, the inflation rate and phenomena directly associated with it, the development of the Polish macroeconomic situation, or relations with the EU resulting in the inflow of EU funds.
A decline in the number of new projects being started at the moment will affect the construction market in 2023. PMR’s latest report, “Precast concrete market in Poland 2022”, presents three scenarios for the development of this market in the coming years, depending on the changes in these key factors. Based on the analysis, it is clear that the market is facing a sharp decline in demand in the following years.
Find comprehensive information about the current state of the Polish precast concrete market in the PMR report:
Precast concrete market in Poland. Market analysis and development forecasts for 2022-2027
Strong consolidation in the precast concrete market
PMR analysts indicate that there are currently around 240 companies manufacturing heavy precast concrete products in Poland. However, the largest companies have a key impact on the market. The top 15 companies account for almost 40% of the total Polish sales of heavy precast concrete products in Poland. When the group of the largest manufacturers of precast concrete is increased to 50, the share of these entities in the Polish market already reaches over 75%.
Precast concrete is popular on construction sites
Precast concrete products are a well-known and relatively common solution used in most types of construction projects. PMR analysts estimate that currently:
- heavy precast concrete is used by more than 8 thousand large contractors (employing more than 9 staff)
- in the group of small construction companies, more than 17 thousand report the use of heavy precast concrete in their construction activities.
The figures below come from PMR’s Construction Confidence Survey conducted in August 2022 (the Construction Confidence Survey is the study carried out by PMR annually since 2004 on a sample of large and small enterprises referred to as general contractors).
Small construction companies
Large construction companies
Projected decline in investment activity in 2023
The precast concrete market in Poland has been growing rapidly in recent years. In 2017-2021 the nominal compound annual growth rate (CAGR) for the market was close to 17%.
As a result of the unfavourable trends observed particularly in the building construction segment, PMR expects a strong decline in the precast concrete market in 2023. This will result in a decreased share of the precast concrete segment in the value of the Polish construction market.
We estimate that in 2023 the rate will shrink from around 2.4% in 2022 to just over 2.2% in 2023. However, this will still be a better result compared to 2021 and earlier years.
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Construction Business Unit Director