After three stable years, the aggregate revenue of the top 40 construction companies operating in Poland grew by 16 percent, in nominal terms, thus reaching PLN 56 billion in 2021, and it was mostly the effect of the overall growth of construction costs. For the same reason, the nominal growth of revenue posted by construction companies in 2022 will be the highest in over a decade (over 23 percent). However, the years 2023 and 2024 will be marked by numerous challenges, mainly due to stagnation in backlogs, as these have suffered decreases of several percent in real terms recently.
The top 40 construction groups reported PLN 56bn in aggregate revenue in 2021, which represented nearly 30 percent of total revenue posted by medium-sized construction firms and large construction companies, i.e. companies which employ more than nine workers, according to the latest report entitled “Construction companies in Poland 2022-2027” from research company Spectis. Due to high inflation, construction companies are poised to report nominal growth of around 23 percent in 2022, reaching the record-high level of PLN 69 billion.
The Polish construction sector is still highly fragmented, with consolidation processes progressing slowly. The market leader (Budimex Group) had a 4.1 percent share in total revenue generated by companies which employ more than nine workers in 2021. The top five construction groups contribute 11.5 percent of revenue reported by construction companies that employ more than nine members of staff, whereas the top ten companies account for a little over 16 percent.
A Spectis review of active contracts being handled by major companies shows that Budimex, Porr, Intercor, Mirbud, Strabag, Mostostal Warszawa, Polimex-Mostostal, Polaqua, and Gulermak are the groups currently engaged in the highest value projects, mostly due to participation in the large-scale road, railway and power contracts. Among companies specialised in non-residential construction, Budimex, Skanska, Porr, Warbud, Atlas Ward, Unibep, Mirbud, and Erbud report the highest value of contracts currently underway. Unibep and Erbud are at the helm of the residential construction sector.
While in 2019-2020 a condition to qualify for the top 40 construction companies was revenue exceeding PLN 400 million, in 2021 the entry level was over PLN 500 million. From a broader perspective, it was enough to post revenue of over PLN 120 million to be qualified in the top 250 construction firms in 2021.
Construction companies faced a lot of negative surprises in 2022 (e.g. the shortage of large-scale public orders due to the absence of funds available under the National Recovery and Resilience Plan, soaring inflation, and a strong downturn in residential construction). In view of the ongoing slowdown of the construction market, some companies have already revised their strategies. Reports from such companies Porr or Gulermak indicate that construction companies are more and more likely to have to revise their objectives and take tough decisions. Many companies opt for taking a conservative approach to bidding or choosing business diversification in terms of both sector and geography.
As far as the building construction sector is concerned, companies specialised in the construction of storage or logistics facilities are kept busy. Moreover, the segment of military facilities also offers increased potential. Such companies as Budimex, Warbud, Mirbud, Erbud, and Unibep have already secured contracts in this market area.
Regarding the civil engineering construction segment, there are companies developing competencies in new market areas. These include Torpol, which grows operations in the segment of specialist equipment, gas and fuel automation (as part of Torpol Oil & Gas), Unibep, which expands in the power and industrial segment, and Mota-Engil Central Europe, which works on the development of the Elektromechanical Works Department. Construction companies shifting their focus to energy transformation also include Budimex that steadily growing operations in the RES sector (in particular in the wind sector), and Erbud, which intends to actively operate in the RES segment as well during the slowdown in the building construction segment, but it will currently focus on foreign markets. Mostostal Warszawa, Budimex, and ZUE also work on expanding their presence in overseas markets.
