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Construction sector to grow steadily over the next 4-5 years

Wednesday, Mar 19, 2008

Bulgarian construction sector would grow by an annual 12 to 15 per cent over the next four or five years, as long as the Government succeeds in providing an adequate regulatory framework that would benefit everyone - from large investors to end-consumers, deputy regional development minister Savin Kovachev said, as quoted by Stroitelstvo Gradut weekly.
Sofia attracted about half of Bulgaria’s foreign direct investment FDI) and generated 30 per cent of its gross domestic product (GDP), architect Atanass Tossev, who is a member of Bulgaria’s Chamber of Architects (BCA)’ managing board, said. The capital should not try to concentrate all production and human resources, though, he added. Regional governor Todor Modev declared the authorities’ firm resolution to work toward decentralisation and relocation of energy-and labour consuming industries beyond Sofia’s boundaries.
Bulgaria’s building sector accounted for seven per cent of the country’s GDP in 2006, with 4 000 operational companies on the market. In recent yeras, the market has seen a 12-15 per cent constant growth in the volumes of construction works. The trend will remain unchanged over the next 4-5 years, according to the forecasts of Bulgarian Construction Chamber, quoted by Stroitelstvo Gradut.
Prices of construction materials, which have risen by 12.6 per cent in 2007, will be a crucial factor for the companies’ expediency. The main reasons behind the global property price hikes, were the rising prices of building materials and the domestic rise in the costs of building services, Stroitelstvo Gradut said.
Investment in construction amounted to 42 per cent of the total volume of investment in the country for 2007. Analysts predict increased activity in industrial, retail and entertainment developments in the upcoming couple of years.
FDI in construction sector amounted to 508.3 million euro in 2007, registering 10 per cent increase on 2006’s figure of 466.6 million euro.
Investment in infrastructure in 2006 reached 4.699 billion euro, recording 4.5 per cent growth on previous year, the National Statistics Institute data showed.
The main problems facing the construction sector in Bulgaria was strong competition, the labour force shortage, growing prices of building materials and services, difficult access to external sources of finance, insufficent specialisation in particular construction fields, wasteful production processes, not enough training and development of its staff, as well as less than adequate marketing.

Source: www.propertywisebulgaria.com