Bulgaria’s construction industry to reach US$10.9 billion in 2020
The Bulgarian construction industry’s outlook is forecast to show a better performance compared to the last five years, with average annual growth in real terms set to improve from -1.95% during the review period (2011 – 2015) to 2.10% over the forecast period (2016 - 2020); according to Timetric’s Construction Intelligence Center (CIC).
Consequently, Timetric's CIC expects the industry to rise from a value of US$9.8 billion in 2015 to US$10.9 billion in 2020*. Investments in road, rail and transport infrastructure, as well as improvements in consumer and investor confidence, and in regional and global economic conditions, will be the main drivers behind this growth.
There are, however, limitations associated with the industry's future outlook, most notably due to limited funding, fiscal constraints, the termination of incentives for new renewable energy and high dependence on European Union (EU) funds for infrastructure projects.
Infrastructure construction was the largest market in the Bulgarian construction industry, accounting for 47.1% of its total value in 2015. According to Timetric research, the market is expected to increase in importance over the next five years, to account for 48.7% of the industry's total value in 2020. The market will be supported by the government's plans to improve the country's transport infrastructure, such as the Transport Infrastructure 2014-2020 program. Various road infrastructure projects are also planned to be completed over the forecast period, including the Struma motorway, which will connect Sofia with the Greek border and a motorway that will connect Varna with Burgas. The market is anticipated to grow at a CAGR of 4.39% in nominal terms, to value BGN7.4 billion (US$4.8 billion) in 2020.
The infrastructure market will be followed by residential construction, which is expected to account for 14.6% of the industry's total value in 2020. The demand for housing units declined during the review period, due to the weak economy and tight credit conditions. However, the residential construction market is on a path of recovery, along with general improvement of the economy, evidenced by the increase in building permits and residential property prices. Consequently, Timetric expects market output to record a CAGR of 2.68% in nominal terms, to value US$1.4 billion in 2020.
This information is taken from the Timetric report: 'Construction in Bulgaria - Key Trends and Opportunities to 2020'.
Source: Company Press Release