Construction will grow quickly, report shows

Greece’s construction sector will get a significant boost from the funds disbursed through the European Union’s Recovery and Resilience Facility, Fitch Solutions estimates in a report released last week.

“Greece’s construction sector will see real growth of 2.4% year-on-year during 2021, having experienced a limited impact from the Covid-19 pandemic, as it continues to claw back industry value toward its pre-eurozone crisis size,” the report says.

Still, the sector will not recover this decade to the levels seen before the 2009-10 financial crisis, the report says.

Fitch Solutions estimates construction will grow at an annual average of 3.1% between 2021 and 2025, after a decade of considerable turbulence.

The Greek construction industry’s value reached a maximum of €18.1 billion in 2006, only to plummet to €2.2 billion in 2019. In 2021, it is estimated at €2.5 billion, rising to €3.7 billion by 2030.

“Our industry forecasts are predicated on the swift pace of vaccination against Covid-19 in Greece,” the report says. “In December 2020, our Pharmaceuticals and Healthcare team at Fitch Solutions assigned Greece to Group 1, alongside other developed markets in our vaccination group timeline, meaning that the dosing that began in December 2020 will see a significant proportion of priority population vaccinated by end-June 2021,” the report continues.

“According to ‘Our World In Data,’ Greece had administered at least one Covid-19 vaccine dose to 54.1% of its population as of July 27, with 47.9% of the population having received two vaccine doses and thus being fully vaccinated. While construction work remains permitted to continue in Greece, providing support for activity in the near term, the continued rollout of the vaccine will begin to provide industry participants with greater confidence regarding the viability of future project investment and a broader return to normalcy,” it adds.

The beginning of the EU disbursements will provide an immediate boost to investments in buildings’ energy efficiency, in renewable energy sources and transport vehicles, such as electric cars, with little to no emissions, says the report. Fitch Solutions notes that Greece will spend €6.4 billion on these actions.