Czechia: Project work market will grow by 3.5 percent this year

by   CIJ News iDesk III
2022-05-06   13:42

The market for project work will grow by an average of 3.5 percent this year, with slightly more growth expected by designers focusing on building construction. In the future, rising inflation and an increase in the CNB's key interest rate may also affect designers, and in 2023 the market growth rate is estimated to fall to 2.9 percent. This follows from a study by the analytical company CEEC Research, which was provided today.

"I expect modest growth in the public sector, given the promised budgets of the largest investor organizations (Roads and Motorways Directorate of the Czech Republic, Railway Administration) for construction preparation. Ukraine," said Lukáš Hruboň, Sales Director of Valbek EU.

Designers designing mostly buildings expect the market to grow by 3.8 percent this year and by 3.4 percent for the year. In contrast, designers designing mostly civil engineering projects expect market growth of 3.1 percent this year and two percent in 2023, according to the study.

"In 2022, we expect rather stagnation or a slight decline in the design market of buildings and transport structures. We expect a decline mainly in the segment of preparation for repairs and maintenance, in the investment segment we expect rather stagnation," said Chairman of the Board of Design Prodin Leoš Jelínek.

According to the study, sales of project companies will grow by 4.9 percent as the volume of project work grows. In 2023, project companies expect revenue growth of 4.1 percent. Building design companies expect revenue growth of 5.1 percent this year, while civil engineering designers are up 4.4 percent.

According to experts, further economic growth may be threatened due to the market situation. "We are heading more towards a recession. The ubiquitous inflation and the associated tightening of financing conditions by the CNB is and will be limiting for many private investors. In the future, this may affect the structure of project work with a greater focus on housing and development," said Peter Markovič from Xella Czech & Slovakia.

On the other hand, he stated that due to the fact that the projects are planned on an ongoing basis and even for several years ahead, it assumes the stability of demand. "Both in residential and non-residential construction. The excess demand for housing, even with a certain delayed inertia, should ensure a sufficient occupancy of design offices," he added.

The occupancy of project companies is at 95 percent of capacity and they usually have contracts contracted for nine months in advance, the survey adds.

Source: CEEC Research and CTK