Construction

Construction

KPMG’s Construction sector team supports clients in handling today’s complex issues, utilising our industry knowledge and local experience.

KPMG’s global Building & Construction practice is a network of experienced professional...

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Detailed information and analysis on taxation relating to the real estate sector in CEE.

 
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Economic recovery, which is stimulating manufacturing and growing urbanisation, has created a constant demand for infrastructure in all forms, which has caused a fundamental shift in focus for the players in the sector. The traditional imperatives of commercial, residential and industrial building projects have taken second place in many geographies to energy, natural resources, transportation, communication and technology, and other civil and social infrastructure projects.

The majority of the respondents to KPMG’s 2013 Global Construction Survey (which reflects the views of executives from 165 leading construction and engineering companies) determine the demand for infrastructure as the single biggest driver of market growth. This, however, makes the industry heavily reliant on government spending on infrastructure and uncertain about alternative funding.

Market conditions, though improving, have still not reached the levels of six or eight years ago, and with finite private and public sector investment capital, companies are naturally cautious about prospects. 

The same trends are observed in the Bulgarian market. Still, the statistical data for 2013 shows that the construction of infrastructure lags behind commercial, residential and holiday building projects. The lack of significant private investments and state and municipality capital expenditure makes the sector dependent on EU funded projects. In this regard, the local players see the prospects for stability and growth of the sector in the new EU funding period (2014 – 2020). 

In Bulgaria, KPMG’s Construction sector team supports clients in handling today’s complex issues, utilising our industry knowledge and local experience. KPMG's global network enables us to build on the international knowledge base, experience and resources, to develop and innovate our services and to provide Bulgarian and international companies with advice and assistance tailored to their strategic and practical needs.

The trends and challenges to the industry make the companies more focused on the following key issues:  

Increasing efficiency: Cost optimisation and supply chain efficiency are just two examples of how firms are able to protect margins by managing cost and thus issuing competitive tender submissions while still maintaining profitability.

Risk management: Ensuring issues and risks are identified and mitigated as early as possible is vital to achieving efficiency and competitive advantage.   

Investment in people: Constructors have to balance the investment in resources and the demand, which for capital projects may not arrive in time.

Growth: Even in challenging times, it is important that firms keep strategic growth opportunities in mind. With stiff competition in home markets, some firms are developing an appetite for expanding overseas, either through M&A or organically. Expansion can also come in the form of adding new services or creating an integrated offering in order to serve new clients.

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