Recently published research from Timetric, "Construction in Bulgaria - Key Trends and Opportunities to 2018", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 11/13/2014 -- The Bulgarian construction industry recorded a compound annual growth rate (CAGR) of 9.41% during the review period (2009-2013). The industry contracted during the review period, as a result of a -25.8% decline in foreign direct investment (FDI) from BGN1.2 billion (US$853.1 million) in 2009 to BGN915.7 million (US$601.6 million) in 2012. However, FDI increased by 0.3% in 2013 to reach BGN918.4 million (US$623.3 million). However, this is still below its 2009 peak. The industry will be supported by allocation of cohesion policy funds, and government focus on infrastructure construction. The industry's output is, therefore, expected to record a CAGR of 2.54% over the forecast period (2014-2018).
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- According to the Bulgarian National Statistical Institute (NSI), the average seasonally adjusted construction production indices increased from 82.3 during the first seven months of 2013 to 85.0 during the first seven months of 2014. Moreover, the total number of permits increased from 4,271 in the first half of 2013 to 4,316 in the first half of 2014. The number of residential building permits increased from 1,915 to 2,136, administrative buildings permits increased from 64 to 91, whereas other building permits fell from 2,292 to 2,089 during the same period. The gross value add of the construction industry in real terms fell from BGN726.0 million (US$492.7 million) in the second quarter of 2013 to BGN719.0 million (US$484.1 million) in the second quarter of 2014, whereas in nominal terms, it declined from BGN1.0 billion (US$678.7 million) to BGN933.2 million (US$628.4 million) during the same period. The construction industry is, therefore, expected to grow at slower pace over the forecast period.
- In 2013, the government adopted a draft partnership agreement with the European Union (EU) for the use of the investment funds allocated to the country for the 2014-2020 period. Until the end of 2020, BGN19.5 billion (US$13.2 billion) is expected to be invested, of which BGN14.8 billion (US$10.0 billion) will be allocated through Cohesion Policy Funds, which is the EU's approach to achieve the objectives set in the Europe 2020 strategy. These cohesion policy funds will be distributed by seven operational programs, such as transport infrastructure, science and education, innovation and competitiveness, environment, human resource development and good governance. In total, BGN4.5 billion (US$3.1 billion) will be invested in rural development, and BGN171.9 million (US$116.7 million) in the fisheries and maritime sector. This move to increase the country's economic growth and competitiveness will support the growth of the construction industry over the forecast period.
- Bulgaria's long-term railway infrastructure development plan includes the modernization and construction of the railway network along the east-west axis, as well as the refurbishment of important domestic and international railway lines. In addition, factors such as high fuel costs, road congestion, and environment protection policies emphasize the need to improve rail infrastructure. Under the Transport 2014-2020 operational program, several rail infrastructure projects, such as the rehabilitation and modernization of the Plovdiv-Burgas and Septemvri-Sofia lines, will be covered. However, only BGN976.8 million (US$662.9 million) is allocated under the Transport 2014-2020 program, less than the BGN7.8 billion (US$5.3 billion) required to completely upgrade and rehabilitate the country's rail network. Investments to improve the country's rail network will support the growth of the rail infrastructure category over the forecast period.
- Bulgaria lacks an efficient waste-management system, and still has 113 operational waste dumping sites that do not meet the terms of the EU landfill directive. However, the country has set a target to achieve 50% recycling of municipal solid waste by 2020. Under the National Waste Management Plan 2014¬-2020, the country aims to become a zero-waste society by reducing landfill waste and constructing 55 waste-treatment systems. The country's need to address waste management is likely to support marginal growth in the waste-processing plant category over the forecast period.
- Bulgaria has set a target to achieve a 16.0% share of renewable energy in the gross final energy consumption, and increase energy efficiency by 25.0% by 2020. According to Eurostat, in 2012, Bulgaria achieved its set target for 2020. Moreover, the country is suffering from electricity oversupply, due to low domestic consumption, and increasing solar and wind capacity. Therefore, the government reduced its feed-in-tariff by 20.0% for solar and wind producers. This move is likely to impact the electricity sector, resulting in the slow growth of the energy and communications infrastructure category over the forecast period.
Companies Mentioned in this Report: Enemona AD Kozlodui, Transstroy-Burgas AD, Geotechmin OOD, Glavbolgarstroy Holdings AD, Yavor Plc
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