site.btaConstruction Chamber: Construction Output Down to 8.2% in First 9 Months of 2022

The decline in construction output that started in 2021 persists and was 8.2% in the first three quarters of 2022 compared to the same period of the previous year, according to the latest economic report on the construction sector by the Bulgarian Construction Chamber.

Preliminary data of the National Statistical Institute suggests that the construction output in the first nine months of this year totalled BGN 10.6 billion, of which BGN 6 billion was used for by constructing residential and non-residential buildings, while the other BGN 4.6 billion was for water and sewerage, railway, road, and energy infrastructure. For comparison, the output over the first nine months of 2020, after which the decline began, was BGN 14.8 billion.

Chair of the Board of the Bulgarian Construction Chamber Ilian Terziev said, "The data is extremely worrying, and it does not even take into account real inflation". According to him, this situation can be blamed on the lack of indexation of contracts with public contractors, while no one is taking into account the construction materials price spikes. "Yes, the caretaker government adopted a methodology, but the lack of uniform guidelines for its application allows for different interpretations by individual contractors," Terziev added. He believes that it is in the government's interest to have a stable and functioning construction industry that contributes taxes and social security contributions.

The first nine months of 2022 saw an increase of 14.7% in the number and 136.5% in the value of public works contracts. There was, however, a decline in contracts awarded after tendering - a 15.2% drop in the number, and a 20.1% drop in value.

According to preliminary data from the Bulgarian National Bank, as of November 18 this year, foreign direct investment for the first nine months of 2022 in construction amounted to EUR 58.2 million, down by EUR 33.7 million compared to the same period last year.