Boston, MA -- (SBWIRE) -- 07/04/2013 -- Our outlook for the Greek construction industry remains bleak as we forecast yet another year of contraction in the industry during 2013, despite three years of continued decline. The downturn is evident in both the housing and infrastructure segments, as private residential construction and government sponsored public projects ground to a halt. In line with our overall view about existing projects facing significant delays and funding issues, we see little scope for a quick rebound in the construction industry during our 10-year forecast period.

Greece's construction industry is estimated to have contracted by almost 14.6% year-on-year (y-o-y) during 2012 in real terms, and there is little hope for resurgence in 2013 as reduced spending on planned projects and diminished demand from the private sector (owing to higher property taxes, tight credit and rising unemployment) discourage investors from returning to the market. However, two bright spot for the construction industry is the support that the infrastructure segment draws from the EU and the convergence and cohesion funds that Greece receives from the European Commission. Equally encouraging for the infrastructure sub-sector are the government's plans to privatise some of its infrastructure assets, which are expected to generate EUR50bn by 2015 and could open up the potential for capital investment by the new private owners into existing infrastructure.

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Key areas with growth potential:

- Transport Infrastructure: In August 2012, Greek development minister Costis Hatzidakis announced that the government will increase its focus on new transport infrastructure projects to boost development in the recession-plagued economy. Key transport projects include an extension of the Athens metro network, completion of a metro network in the northern city of Thessaloniki, expansion of the suburban rail network and the regional ports of Patras, Igoumenitsa and Lavrion. As such, we see the railways, airports and ports sub-segments to see particularly strong investment inflow over the forecast period.
- Renewable Energy: Greece's government is keen on making the country Europe's solar energy powerhouse, with up to EUR20bn being invested over our 10-year forecast period to 2022. Industry participants are already positioning themselves to tap the growth the segment holds. As recently as March 2013, Conergy revealed plans to construct a 500 kW solar photovoltaic (PV) plant in Molai, making it Greece's fifth PV installation in 2013. Earlier in January 2013, Italy's Enel Green Power SpA started 25 solar plants in the country. In the same month, a 100 kilowatt solar park near the Greek city of Komotini started operations.

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