This report profiles Poland’s construction materials sector, analyzing sectoral trends through 2013 and offering market forecasts for the coming year. It also reviews corporate news for firms such as Lafarge, Grupa Kety, Megaron, and Barlinek, among many others.

After the positive annual performance in 2011 and H1 2012, the building materials market returned on a downward path in the second half of last year, driven by the similarly poor performance of the construction sector. The situation is explained by the end of the investments related to the Euro 2012 soccer championship and the infrastructure projects financed by the EU Cohesion Fund. Furthermore, residential investments remained at a low level.

In the short run, the building materials market and the construction sector are definitely going to face challenges, particularly in the public building segment, but the future outlook is not entirely gloomy, as the lowering demand from infrastructure can be replaced by alternatives in sectors such as rail and energy. Furthermore, the residential market has stabilized and the new state-subsidized home-loan scheme aimed at the primary market units might also contribute to some extent to a revival of new developments. Nonetheless, the construction sector is expected to see visible recovery only beginning with next year, when EU co-financed projects for 2014–20 are launched.

Key Points:

• In corporate news, in July 2013 cement maker Lafarge finalized a concrete plant in Gorzow. Aluminium company Grupa Kety has reported higher profit but lower consolidated sales revenues in January–September 2013. The construction materials producer Megaron plans to double production capacity and intends to expand its existing facility and build a new plant. And wood flooring maker Barlinek’s majority shareholder announced a call for shares, possibly in a run-up to a delisting from WSE.

• Out of 25 major construction materials products surveyed by the statistical office, 19 recorded a y/y decrease of output in 2012, compared to only six groups in 2011. Cement and ready-mixed concrete segments recorded the steepest deterioration last year. Sales of cement also contracted by a double-digit annual rate in 2012.

• In terms of output, only four groups in the the building materials market recorded annual growth over H1 2013, namely floor, walls and ceiling coverings made from plastics (up by 17.6% y/y), wood parquet panels, ceramic sanitary wares, and expandable polystyrene. The steepest decline—above 30% y/y—was recorded in production of ceramic flooring blocks, asphalt, and clinker cement.