The above is stated in the IOBE survey entitled "Trends. Challenges and prospects for the development of Construction in Greece" presented by the Foundation together with the Public Works Engineering Contractors Fund (TMEDE).
As they reported, the increase in the construction object reached 84% from 2017 to today, while within the context of the Recovery Fund and the NSRF 2021-2027, in combination with private investments, more than €52 billion will "fall" on the market. the next three years including bank financing. It is noted that the outstanding balance of the largest companies in the sector amounted last year (data up to nine months) to €15.35 billion, significantly increased by 63% compared to the previous year and approximately three times compared to the average of the period 2018-2020. According to the study, the successful execution of these projects is a challenge for construction companies, as they require, among other things, sufficient human resources, strong liquidity, access to financing resources and fast procedures on the part of public bodies.
As IOBE data shows, construction investment represented 4.8% of GDP in 2022, compared to 14.7% in 2007, while the deviation for 2022 compared to the EU-27 average exceeds 6 percentage points units. The average discount rate to initial budgets in public works tenders fell gradually in 2021 to around 45%, from 57% in 2018. However, a large decrease occurred in 2022 and 2023, when the average discount rate fell further to 30.1% and 22.6% respectively, due to the significant increase in construction costs, but also the increase in the number of tendered projects.
The industry today and the prospects
Today, the sector employed a total of 197 thousand workers in 2022, a number that shows relative stagnation, with a slight upward trend in recent years. In the activities of Architects and Engineers 74 thousand people were employed in 2022, without a noticeable change from 2017. As the figures show, the Recovery and Resilience Fund (TAA) will finance infrastructure projects that will fuel the growth of Construction in the coming years. Based on the analysis of the actions of the National Recovery and Resilience Plan (NRSP), it is estimated that grants of €9.9 billion will be directed to projects directly related to Construction, mobilizing total resources of €12.8 billion. The construction projects that they will be supported with grants from the TAA, mainly concerning the pillars of the Green Transition (€6.3 billion) and Private Investments (€2.7 billion).
Together with the resources from the TAA loans (and the financing resources mobilized from the loans) it is estimated that for projects directly related to Constructions, a total of €23.9 billion (€12.8 billion) will be mobilized in the period 2022-2026. from grants and €11.1 billion from loans). Consequently, investments in Construction are estimated to significantly increase their share in GDP in the period 2023-2026.
The annual production value (turnover) in Architects and Engineers activities is estimated to approach €4.5 billion by 2025, up from €3.6 billion in 2022.
Although the prospects for the development of Construction and maximizing its contribution to the Greek economy in the coming years are particularly positive, there are still significant challenges for the sector. These include, among others, issues related to the human resources and financing of businesses in the sector, to the institutional framework of the public works production system and national planning for infrastructure, to the integration of technology and the digitization of Constructions in order to strengthen the industry productivity and finally with the adoption of ESG standards by construction companies.
Labor shortages are projected to be the key barrier to growth in 2023, while financing difficulties are also rated negatively in terms of their impact on construction activity. The lack of labor leads to delays that can lead to budget overruns and project schedules not being met.
The prospect of strong growth in domestic construction activity will create additional needs for a workforce of various specialties. According to the study's estimates, the total number of construction workers should increase in the period 2024-2026 to approximately 250 thousand workers, a level that is 51 to 55 thousand workers higher.
