May 26, 2022

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PIE: Shortage of building materials is a problem

PIE: Shortage of building materials is a problem

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In April, the construction industry situation improved in April compared to the previous two months. This is the result of the Monthly Economic Indicator (MIK), compiled by the Polish Economic Institute and Gospodarstowa Bank Kraguego.

“MIK was 108.2 points, up 6.5 points from March and up 12.5 points from February. The increase in the ratio is attributed to higher levels of MIC components related to liquidity (124.2 points), staffing (119.2 points), production capacity (115.4 points), and under Neutral level There are components related to new orders (91.2 points) and investments (92.5 points) ”- as stated in the report of the Polish Economic Institute, made available to PAP.

She pointed out that the increase in the value of sales and the number of new orders on a monthly basis does not apply to all contracting companies. The increase in sales value was recorded by 27%. Companies, down 23 percent. In the case of the number of new orders, the difference between the share of companies increasing and decreasing was greater. Only 17 percent. Builders got more orders, up 27 percent. less.

“Since March, the share of construction companies for which unavailability of products, semi-finished products and materials is a major obstacle to their operations has increased. In February, 46% of companies indicated a shortage of materials, 52% in March, and up to 61% of companies in April.

The share of construction companies reporting payment bottlenecks is also increasing. In March it was 40 percent, and in April it was 45 percent. construction companies.

In addition, a high percentage (76%) of construction companies still complain about uncertainty about the economic situation. An assessment of the obstacles to construction companies operating can be linked to the situation related to hostilities. The lack of material availability often results from disrupted supply chains, especially when suppliers are outside our eastern borders, the report said.

PIE economists also mentioned that at the same time every fourth construction company plans to hire new employees in the next three months, at just 8 percent. release them. At the same time, the majority of contracting companies (56%) cited staff shortages as a major obstacle to work.

“But the willingness to hire new employees is not in line with the desire to raise salaries, such plans for the next three months are for 15% of companies, and the majority (81%) want to keep their salaries flat. Personnel costs are a major barrier to the 60 percent of construction companies that surveyed. Reluctance to raise prices may result from higher prices for building materials and energy. This prevents companies from offering higher salaries to employees if they do not want to raise prices significantly for their services” – assessed in a PIE report.

Economists at the institute were conservative that the positive mic reading for April could be in large part a result of seasonal demand swings. In the spring, this demand is greater due to better weather conditions that favor construction work. In the coming months, the situation in the construction industry may stop improving due to the war in Ukraine.

“This is due, on the one hand, to high prices for building materials and possible shortages due to disruption of supply chains. On the other hand, the construction industry may encounter difficulties in hiring workers. Construction is an industry in which many migrant workers from Ukraine were employed.

Currently, some of them have decided to return to the country to take part in the war. It is unlikely that the refugees who come to Poland will be able to replace them, because most of them are women. ”

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