The Bulgarian construction industry contracted by 14.5 per cent in July 2009 as opposed to corresponding figures from July 2008.  This represents its sharpest decline in several years, data from Eurostat has shown, quoted by Stroitelstvo Gradut on September 21.

Sadly, this decline is amongst the worst in the European Union and this in a sector that was among the fastest developing over the past six years.

The shrinkage of the Bulgarian construction industry occurred because many projects nationwide were frozen. Projects encompassing anything from real estate to office space, logistical centres, warehouses, and others, were either postponed or scrapped altogether. Infrastructural projects, which were prioritised during the global crisis, although helpful, could not offset the industry's stagnation and compression.

The prospects for August 2009 as well as Q4 of 2009 are also grim because "pessimism is likely to prevail among construction entrepreneurs," Stroitelstvo Gradut has said.

Primary factors behind the pessimism are cited as "insecurity of the economic environment, lack of financing and investment, and lack of consumer demand".

The construction sector's only salvation lies in the event of possible financing of European projects and the possible go-ahead for large scale infrastructure construction nationwide. Programmes under the Ministry of Transport until 2013 are expected to be worth more than 990 million euro, whereas Regional Development-related construction potentially offers more than 225 million euro of investment.

The Bulgarian construction sector is among the hardest hit – third from the bottom in Europe – but the worst fall was in Spain where the sector shrank by 20.5 per cent over the identical period. Romania, with a 17.5 per cent decline, is in second place.

Poland marked increased activity – a 10.6 rise – whereas Germany's construction rose by 1.9 per cent. On average, Europe's construction sector is down 12.9 per cent, Stroitelstvo Gradut has reported.

Source: propertywisebulgaria.