The impact of the coronavirus on the construction sector – PMR research

Data on construction and assembly production published by the Central Statistical Office (GUS) confirms this thesis. A 3.7% increase in March year-on-year suggests that the restrictions on construction sites did not lead to a freeze in construction work. Relatively favorable signals are also coming from construction companies, indicating that there is currently no panic and no significant decline in construction activity in the sector of construction material producers.

At the beginning of April, the company PMR conducted a short survey among its customers and partners from four sectors: Retail, Pharma/Healthcare, Construction, and IT/ICT.

The survey was conducted in a quantitative and qualitative manner (standardized interviews with a purposive sample of selected companies). It was conducted with decision-makers and competent representatives of the companies, with 3/4 of the respondents being presidents or representatives in top management/directors of the companies. A total of 109 companies were surveyed.

The survey shows that:

• As many as 86% of the surveyed companies in the construction sector are currently operating without restrictions, adapting to the prevailing conditions. Companies in the sector are more likely to indicate that they are limiting their activities (11%) rather than expanding them (3%) in the current crisis conditions. When restrictions arise, they are, on average, described as reaching 30% (compared to pre-crisis activities). The most problematic aspect of their business for companies in the sector is a reduction in demand and investment limitations.
• Compared to sectors directly affected by the pandemic, construction does not experience significant sales restrictions – 45% of companies observe a relatively slight decrease in sales (15-20% decline).
• However, the coming months may bring greater slowdown – already 87% of the companies surveyed by PMR predict a drop in sales in the second quarter of 2020 (around 20% decline).
• Almost 3/4 of the companies are suspending or giving up on planned investments in the organization. 

The companies surveyed by PMR also see some positives in the current situation. As factors that will have a beneficial impact on the construction market in the future, they mentioned the acceleration of digital transformation processes, new ways of working, digitalization of certain processes, as well as the expected natural selection process for players in the market (“the better ones will survive, the worse ones will drop out”), and the wide-ranging decline in imports in the construction environment (an impulse and potential for production growth in Poland).