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Trends and Opportunities of Construction in Greece 2018

Most up-to-date research on "Construction in Greece - Key Trends and Opportunities to 2018" to its huge collection of research reports.

Synopsis

This report provides detailed market analysis, information and insights into the Greek construction industry including:

  • The Greek construction industry's growth prospects by market, project type and type of construction activity
  • Analysis of equipment, material and service costs across each project type within Greece
  • Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the Greek construction industry
  • Analyzing the profiles of the leading operators in the Greek construction industry.
  • Data highlights of the largest construction projects in Greece

Executive summary

The Greek construction industry recorded a CAGR of -21.55% during the review period (2009–2013). During the review period, construction industry growth was severely affected by the eurozone crisis, and prospects for growth are likely to remain subdued over the forecast period (2014–2018), due to the austerity measures specified by the ‘troika’ – the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB) – for supplying bailout loans. The government’s initiative to promote the country as a logistics hub and tourist destination will attract investments in the commercial and infrastructure markets. Consequently, the construction industry’s output is expected to record a CAGR of 0.02% over the forecast period.

Scope

This report provides a comprehensive analysis of the construction industry in Greece. It provides:

  • Historical (2009-2013) and forecast (2014-2018) valuations of the construction industry in Greece using construction output and value-add methods
  • Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
  • Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
  • Analysis of key construction industry issues, including regulation, cost management, funding and pricing
  • Detailed profiles of the leading construction companies in Greece
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Key highlights

  • After recording negative growth from 2008 to 2013, a 0.6% positive economic growth is expected in 2014, but the pace of recovery in the construction industry is likely to remain bleak over the forecast period due to reduced investment. According to Elstat the construction production index declined from 39.6 in 2012 to 38.0 in 2013. The total number of building permits declined from 1,428 in January 2013 to 917 in January 2014, a decline of -35.3%. The declines in both private and public building activities represents the subdued growth in the construction activity over the forecast period.
  • According to the Finance Ministry, a new real estate tax, introduced in 2013, is expected to generate EUR2.6 billion (US$3.4 billion) in 2014. The new tax, which has replaced a series of property taxes, is applicable from the first square meter on every apartment, office or store and will vary depending on the type and region of building. One of the earlier tax includes an exemption of EUR200,000.0 (US$265,151.2) for the first home buyer. The taxpayer will have to pay 25.0% more tax for the buildings less than or up to four years old, than for old buildings. Owners without any pending debts, or those with property less than 150.0m2, will be applicable for 50.0% tax exemption. Additional tax ranging from 0.1% to 1.0% will be applicable for the property, whose value exceeds EUR300,000.0 (US$397,726.7). The introduction of new tax is expected to negatively impact the growth of the construction industry over the forecast period.
  • To stimulate growth in renewable energy, the government provided a Renewable Energy Source (RES) fund to support renewable energy producers, but the mounting debt in the fund forced the government to impose cuts in the feed-in-tariff (FIT). According to Greek electricity market operator Lagie AS, the RES fund deficit increased from EUR340.7 million (US$438.0 million) in 2012 to EUR549.8 million (US$755.6 million) in 2013. The new FIT cut, which came into effect on June 2013, includes that a plant under 100KW will receive a cut of EUR95.0 per megawatt (US$125.9), whereas the plants above 100KW will receive EUR120.0 per megawatt (US$159.1) – a 44.0% cut. Although the country added a 1,047.0MW solar plant in 2013, and is approaching towards its goal to add 2.2GW by 2020, the recent cuts will result in a marginal growth in the energy and telecommunications infrastructure category over the forecast period.
  • According to ELSTAT, the annual turnover index for the manufacturing industry in the total market declined from 96.6 in February 2013 to 96.3 in February 2014, indicating a decline of -0.3%, which is less than the decline of -8.1% registered between the period February 2012 and February 2013. According to Markit, a global financial information and services company, the manufacturing purchasing managers index (PMI) was 51.2 in January 2014, registering the first above-50 reading since August 2009. This improvement was a result of the rise in export demand and new orders, indicating stabilization in the manufacturing industry. Despite an improved PMI, the investment is likely to remain cautious, signaling subdued demand for the construction of manufacturing plants over the forecast period.
  • The country was forced to cut its healthcare budget by 25.0% between 2009 and 2011 in exchange for the EUR240.0 billion (US$329.0 billion) bailout program. The country’s healthcare insurance was linked to employment, and the rise in unemployment has left many people without access to healthcare services. Healthcare spending per capita was EUR1,699.9 (US$2,361.0) in 2011, much lower compared with Organization for Economic Co-operation and Development (OECD) average of EUR2,404.1 (US$3,339.0) in 2011. Moreover, to reduce costs, the government is consolidating clinics and forming a primary healthcare network. As a result, the attractiveness of the healthcare system is likely to be diminished over the forecast period.

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