POLAND: Poland's construction industry booms despite labour and material shortages

It is becoming increasingly difficult to look up at the Warsaw skyline without noticing the multitude of cranes working away amongst the dwindling communist blocks and the ever-growing number of modern skyscrapers. This year the Polish construction industry has experienced an exponential increase in investment compared to previous years. The influx of investment can be attributed to the fact that numerous international banks have recently established themselves in Central Europe, particularly in Poland. The banks offer extremely competitive rates of interest on credit, making borrowing much easier. This had led to an increase in the number of people applying for and being granted mortgages to buy new apartments, increasing housing demand across the board. This demand has, however, caused a certain amount of strain on the construction industry; resources both human and material are in short supply. Jerzy Zdrzalka, CEO of a leading Polish development company, JW Construction told Reuters that securing enough building material had become an issue. "At the beginning of this year there were problems with some construction materials. But luckily most of those materials can be produced in Poland," Zdrzalka said. He said the brick making industry in Poland was enjoying a much needed revival after a lack of demand in recent years. "Because of a small demand for bricks, part of the production capabilities remained unused. An estimated half of all brick factories were closed because there simply wasn't any demand. Today these brick factories can rebuild their production capability, for me it is just a matter of time," he said. At a brickyard in Splawy in the east of the country, the owner said times are busy for him and his workers. "We are working at full blast. There is a huge demand for this product. Finally we can say we are satisfied with what we do. And we do a lot, at a good price. But unfortunately there are queues to get this product, even a few months in advance. But this is evidence that finally something has changed in the building industry. And it is good news and good times for us," Feliks Trojanowski said. The shortages have driven up prices across the board, with one construction company increasing salaries by 15-20 percent this year. This followed a wage increase of 11 percent the year before. The former communist country being short of everything from plumbers to pilots, and that is pushing up wages and encouraging inflation. But Zdrzalka said he is confident prices will stabilise. "If the production capabilities are restored, then even with a rising demand, the market's needs should be fulfilled. I think that when it comes to the basic building materials, the prices will stabilise," Zdrzalka said. It is estimated that as many as 1.5 million workers have emigrated since the country of 38 million became an EU member in 2004, most of whom left for Britain and Ireland. Zdrzalka believes there will soon be an inevitable need to reverse this trend, or at least look to attracting a greater number of migrant workers to Poland. We should also consider the fact, that there will be an influx of workers from abroad in order to keep up the economic growth. It might not be within the next year, two or even five years, but in the long run it is unavoidable, especially with regard to the reduction in population growth, which is intensifying in Poland," Zdrzalka said. "I think we should prepare ourselves for a larger role of foreign workers on the Polish labour market over the next five to ten years," he added. Poland's government still hopes many of the Poles who left for the West will return once they have built up some savings and see that they can now get paid well at home But a recent opinion poll suggested that the hope may be misplaced. A little over half of the emigrants to Britain and Ireland said they planned to bring families to join them rather than to return home.

ITN Source | July 20, 2007

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