General Industry Data
The construction sector is considered one of the most important sectors of the Greek Economy and is closely linked to the economic development of the country, while its importance for shaping trends and developments in the size of the Greek Economy is undeniable. The flow of funds from the Community Support Framework III for the completion of the infrastructure development projects and the undertaking of the 2004 Olympics made the industry an important growth factor. Its capital position in the Greek Economy is also highlighted by the participation of constructions in the formation of GDP, which in recent years was of the order of 10% and together with the related activities reached 20%.
The total number of companies that make up the construction sector amounts to about 2,500, of which 603 are in the form of SA. and Ltd. The total direct employment in the sector exceeded 340,000 people during the execution of the Olympic projects and then decreased due to the recession that followed.
There are 14 public limited companies holding 7th degree degrees.
The construction activity can be analyzed mainly in two sub-categories:
- Public constructions
- Private constructions
Private and public construction activity, which employed the vast majority of construction companies from 1989-1991, declined in the early 1990s due to adverse developments in average housing costs. In particular, it was particularly affected by high mortgage rates, rising construction costs due to rising prices for materials and labor costs, the financial crisis and restrictions on leases. As a result, during the 1990s, the interest of the large technical companies in the construction sector shifted significantly from the construction activity to the infrastructure of the Public Sector.
However, since the end of 1995, mortgage rates have started to fall, leases have been liberalized, and many areas have been included in the city plan. These events, in combination with the undertaking of the 2004 Olympics, strengthened the construction activity and positively affected its development, which was beginning to show signs of recovery. Public works are the most important determining factor in the construction industry. The convergence program of the Greek Economy with the European Union also contributed to this. In the context of the upgrade of the Greek infrastructure, the Cohesion Fund and the B 'and C Community Support Framework (CSF) finance a series of projects that are expected to change the shape of the country upon their completion. The public works that joined the CSF of the period 1994-1999 exceeded the value of 8 trillion drachmas (approximately 23.5 billion euros). While the total resources of the 3rd CSF for the period 2000-2006 will amount to 17.5 trillion drachmas (approximately 51.4 billion euros) of which 4.1 trillion drachmas (approximately 12 billion euros) is intended for transport - roads, ports, urban development, railways, airports and urban transport.
The process of promoting the Fourth CSF is in progress, for which the Commission's proposal for our country amounts to 18 billion euros, with objections, of course, from the most powerful countries that seek to approve a smaller amount.
The completion of the 2nd CSF, the implementation of the GPS (2000-2006) and the perspective of the 4th CSF will significantly contribute to the development of the country, the achievement of economic and social cohesion and the real convergence of the Greek economy with other countries of the EU
Some of the major technical infrastructure projects (completed or continuing to be constructed) are the new Eleftherios Venizelos International Airport in Spata, the Rio - Antirrio link, the Attiko Metro, the Egnatia road axis, the freeway Spata - Stavrou Avenue - E the road axis Patras - Athens - Thessaloniki - Evzonon, the diversion projects of Acheloos, OSE projects etc., while tenders are in progress such as for the Thessaloniki Metro, Thessaloniki Airport, extensions of the Athens Metro, projects for the improvement of the railway network and for large self-financed projects such as the Thessaloniki Submarine Highway, the Maliakos - Klidi, Corinth - Patras, Tripoli - Kalamata, Central Greece, Ionia Odos highways. The above projects are of great importance for the Greek economy and contribute decisively to the development effort of the country. The execution of major technical infrastructure projects resulted in an increase in total employment in Greece, while the increase in industry was significant, and the effects on tackling unemployment were decisive.
Regarding private projects, they could be classified into the following categories: a) Housing, b) Commercial Real Estate, c) Industrial Real Estate, d) Agricultural and Special Purpose Real Estate. This category of real estate builders is covered by certain sub-categories which are classified according to their size in large real estate construction companies or consortia, in small construction companies, in construction contractors and in-house construction and arbitrary construction. In the early 1990s, the sector declined due to the economic downturn that hit the Greek economy and the maintenance of mortgage rates at high levels, rising construction costs and limited rent increases. However, from 1995 onwards, due to the reduction of mortgage interest rates and the inclusion of many areas in the city plan, the picture in this area has improved. A factor that contributes decisively to the development of private projects is the promotion of large infrastructure projects such as major roads and airports, which consequently create favorable conditions for the promotion of private construction activity in the wider area.
The course of the sector in private projects is determined by the development of the construction activity and in particular of the private legal construction activity, which is directly affected by the respective economic conditions. According to the National Statistical Service, the legal private construction activity showed a downward trend in the period 1990-1995, while it followed an upward trend during the three years 1996-1998, a decrease in the period 1998-1999 and a corresponding acceleration of the upward trend in 2001.
Other factors that generally affect the course of the industry are a) the course of the Greek economy, b) lending rates, c) know-how about the co-financed projects, d) the expansion of the construction institution with the BOT method or through Public Partnerships and Private Sector and e) the collaborations of banking and construction groups.
Prospects of the Sector
Today, construction companies are faced with a landscape in the construction industry that appears quite different from what they knew in the early 1990s. The competition between the companies intensified, in a period after the Olympic Games, the recession of the construction activity and with the formation of conditions that impose new organizational structures and change of strategy and management. The growing pressure for business restructuring of the industry has resulted in strong reorientation trends between construction companies (acquisitions, mergers and strategic alliances), which are a relatively recent phenomenon that is coming to diversify the environment of technical companies. In recent years it has been realized that the further development of companies in the industry requires responding to the challenges of know-how, better organization, etc., which can not be addressed with the traditional structure that characterizes the industry.
Despite the problems of delays in the assignment of projects due to the involvement of the institutional framework, the promotion of a variety of projects in 2005 creates better conditions for the continued development of the construction industry. The tenders that have passed and in which a contractor has emerged and those that are in progress directly affect in a positive direction. It is necessary for the country to advance the infrastructure it needs, in order to achieve balanced development and regional convergence, and therefore there are still many projects that need to be completed in the coming years.
At the same time, the promotion of the law on Public-Private Partnerships (PPPs) for small and medium-sized projects, creates conditions for the development of the institution, with a direct consequence of the release of productive forces and the stimulation of the construction sector, which is de facto called to participate. in the shapes.
In addition, several construction companies in the country have already taken steps to penetrate foreign markets, thus strengthening their activity. The most important markets that are the target of Greek technical companies are the wider Balkan area, some of the former eastern countries and several geographical areas from the Middle East and North Africa. The constant changes that take place in the socio-political character of the above countries and their effort to approach the economic data and the quality of life in the EU, creates an increased need for infrastructure projects which in turn requires extremely high rates of construction activity for many years. An important advantage of Greek companies is their accumulated know-how and the relatively low employment costs of the workforce.
Finally, even more intense activity should be expected in areas such as the development and utilization of real estate, energy, environmental protection, etc.
The evolution of the domestic construction market, its prospects and the requirement to face competition
- of the constant renewal and modernization of the main and auxiliary mechanical equipment
- the creation of modern, flexible and efficient business structures both in terms of support and in terms of construction and timely delivery of projects
- the strengthening of the capital structure of the construction companies and the search for new modern forms of financing in Greece and abroad of the continuous increase of the "excellent operating size" of the technical-construction companies
The goals that companies must set to prevail and strengthen their market position are: a) improving competitiveness b) leveraging experience and know-how and c) increasing productivity through achieving economy scale.
Despite the problems that have arisen recently, the outlook for the development of companies in the industry is evolving favorably. The disengagement of project assignments and the consequent promotion of projects co-financed with the European Union, the promotion of large self-financed Road projects and the promotion of PPPs that open up opportunities in the construction market to a new level contribute to this perspective.