Construction in Greece – Key Trends and Opportunities to 2022

Summary

The Greek construction industry is projected to recover over the forecast period (2018-2022), with compound annual growth rate (CAGR) in real terms set to accelerate from -2.4% in the review period (2013-2017) to reach 4.7%. Investment in commercial, residential and industrial buildings is expected to drive the forecast-period growth of the industry. Moreover, government and private sector investment to clear the country’s infrastructure backlog, which grew significantly due to multi-year deep recession, is expected to provide some support to the industry growth over the forecast period.

The government has secured financial assistance from international organizations to develop the country’s infrastructure. In September 2017, the European Investment Bank (EIB) announced that it would provide a loan of EUR2.0 billion (US$2.3 billion) to develop the country’s tourism and other related infrastructure. Moreover, in June 2018, EIB announced plans to provide a loan of EUR55.0 million (US$66.7 million) to the Municipality of Athens for the development of waste management systems, urban rehabilitation, transport, energy and cultural infrastructure.

However, there remains some major downside risks associated with the construction industry’s outlook in Greece over the forecast period. In August 2018, the country successfully exited the bailout rescue programs worth EUR289.0 billion (US$326.1 billion). After this, the country can borrow at market rates and have access to capital markets to raise funds. In order to receive the bailout from the European Central Bank, International Monetary Fund and the European Commission, the Greek government had to agree to implement painful economic reforms, cut public spending and slash government employee salaries.

The industry’s output value in real terms is expected to register a compound annual growth rate (CAGR) of 4.70% over the forecast period.

GlobalData’s “Construction in Greece – Key Trends and Opportunities to 2022”, 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 construction activity

– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Greek construction industry

– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

– GlobalData expects the infrastructure construction market to register a forecast-period CAGR of 1.09% in nominal terms supported by funds granted by the European Union (EU) to develop major infrastructure projects in the country. In 2017, the EU granted EUR377.0 million (US$425.5 million) to Athens’ and Attica’s Urban Public Transport Systems to expand the Metro 3 line by 2020. Moreover, the EU plans to provide EUR730.0 million (US$823.8 million) for the expansion of Thessaloniki’s metro until 2020 and EUR323.0 million (US$364.5 million) for the extension of Kalamaria Metro by 2021.

– The industrial construction market’s growth will be supported by the government’s plan to increase the number of small and medium-sized enterprises (SMEs) in the country. In 2017, the European Investment Fund (EIF) signed an agreement with Piraeus Bank and Alpha Bank to provide EUR420.0 million (US$474.0 million); through this, the government plans to support 2,000 SMEs across the country to expand their production capacity. Furthermore, under the Fund of Funds initiative, the government plans to spend EUR260.0 million (US$293.4 million) to support SMEs and encourage entrepreneurial spirit.

– In 2017, Fraport Greece, the private operator of 14 Greek airports, announced plans to invest EUR330.0 million (US$372.4 million) for the expansion and modernization of the country’s airports by 2021. Furthermore, with a total investment of EUR585.0 million (US$709.4 million), the government plans to build a new airport in Kasteli by 2023.

– Forecast period growth in the energy and utilities construction market will be driven by government’s focus on the development of broadband networks across the country. Under the National Next Generation Broadband Access Plan, the government aims to provide internet accessibility with a speed of 30.0Mbps to all households, and 100.0Mbps to at least 50% of the country’s households by 2020. Accordingly, in March 2018, Hellenic Telecommunications Organization SA, the largest private broadband connection provider, announced a plan to invest EUR2.5 billion (US$3.0 billion) to deploy fiber optic cables, a Fiber to the Home (FTTH) network and a 5th Generation (5G) mobile network in the country by 2022.

– The total construction project pipeline in Greece – as tracked by GlobalData and including all mega projects with a value above US$25 million – stands at EUR67.0 billion (US$75.6 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively balanced, with 47.5% of the pipeline value being in projects in the pre-execution and execution stages as of November 2018.

Scope

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

– Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Greece, featuring details of key growth drivers.

– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

– Listings of major projects, in addition to details of leading contractors and consultants.

Reasons to buy

– Identify and evaluate market opportunities using GlobalData’s standardized valuation and forecasting methodologies.

– Assess market growth potential at a micro-level with over 600 time-series data forecasts.

– Understand the latest industry and market trends.

– Formulate and validate strategy using GlobalData’s critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.