Pest Analysis of Polish Construction Market

Topics: European Union, Poland, Enlargement of the European Union Pages: 5 (1824 words) Published: October 19, 2010
PEST Analysis
PEST analysis of polish market with a particular focus on the polish construction industry has been conducted in order to investigate the important factors that are influencing the industry in this country and having an impact on the companies operating or planning to operate in Poland in the construction sector. This analysis has been conducted in order to help assess how attractive the construction industry in Poland is and what factors can help it to develop or stop the development of it.

Political Factors!
Political situation in Poland is very stable . The process of EU accession provides a guarantee that Poland remains a established democracy, with a market-based economy and with property rights respected. Poland went through a very tragic test of its political stability after 10 April 2010 when the President of Poland and many official notables (head of national bank, ministers, vice presidents etc) have been killed in a tragic plane crash in Russia. Even though that at this day Poland lost many financial and organisational leaders, the country hasn’t experienced any political and economical instability. Also the stock exchange didn’t undergo any serious shocks and there were no problems with maintaining the unchanged credit rating for the country. It proves that the country is stable in terms of politics, well prepared for potential dangers and there is no threat for this relatively new democracy. There are some concerns regarding the legislation issues. The construction law is considered by many specialists as too complicated and not coherent and large part of companies regard it as a great cause for concern. At this moment the legislation for the construction industry is considered as the weakest point by some of the agencies (Poland’s score at for Legal and Regulatory risks is 51.2 out of 100 according to Business Monitor International). To sum up, one of the biggest problems plaguing construction sector in Poland is that existing laws regulating construction projects are out of touch with the economic reality and often construction projects are hindered by incoherent regulations and inconsistent, arbitrary interpretation of legal procedures. However in 2009 the Amended Construction Law has been agreed by the Parliament, which is hoped to bring revolutionary changes that simplify the construction process. This law should come into force very soon, but it is not known when exactly . According to specialists, the latest amendments to the construction law are crucial to meaningful change on the construction market and are are supposed to considerably shorten the time needed to plan projects. This is expected to boost the economy and make it more competitive.

One of anther issues that polish government has been trying to deal with is the burden of taxes and social security payments which are considered to be an obstacle for individuals and companies . So solving the problem of heavy tax burdens should be one of the priorities for the government. Political Swot

Strengths EU membership and strong economic growth in 2008 and 2009 (projected at 5.4% and 4.6% respectively) should facilitate medium-term political stability. Following the Civic Platform (PO)'s victory in the snap elections on October 21, the new PO-led coalition is expected to make new advances with regards to structural reforms and rebuilding relations with the EU.

Weaknesses Considering the long-standing animosity between the executive and the PO, the new government's capacity to push through its reform agenda might be at risk. Opportunities Poland's fundamental foreign policy bias is in favour of EU integration, but maintaining trans-Atlantic ties, is unlikely to be threatened. The new government has promised to rebuild ties with Poland's European neighbours, which were heavily bruised over the past year. While Poland is unlikely to significantly alter its tough bargaining stance, we...
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