Awaiting the remediation and municipal projects, 785 companies are registered – 10.5% of all in the sector
2024 will go down in history as the year in which the construction industry experienced a boom of newly created mostly small companies.
According to the law, only companies registered in the Central Professional Register maintained by the Chamber of Builders in Bulgaria are allowed to work on the Bulgarian construction market. The number of employees divides them into large, medium and small.
To date, there are a total of 7,462 companies in the register created 15 years ago, and 10.5% of them were registered only this year, and mostly in the summer. And 80% are also newly created, it can be seen from the Commercial Register.
The news was announced on the eve of the builders’ professional holiday – Dimitrov Day, by the chairman of the Board of Directors of the Chamber, Eng. Iliyan Terziev.
“The increase in the number of companies registered with us started in the summer and continues in the fall. Those who are registered this year are 785, mostly small ones”, specified Eng. Terziev.
“After the long standstill, work is now expected on the municipal program, on the rehabilitation, and on other sites, where mainly small and medium-sized companies are involved, and they are the backbone of the industry,” stressed Eng. Terziev.
A similar phenomenon, but not as large-scale, also occurred in the period 2015-2017. At that time, the National Program for Increasing the Energy Efficiency of Multi-Family Residential Buildings was implemented, in which the state first invested BGN 1 billion, and then another BGN 800 million .
The municipal investment program that Engineer Terziev is talking about is for a total of BGN 7 billion, and so far, about BGN 3 billion of it is provided for in this year’s budget and in next year’s budget.
These are mainly improvement projects, there are also quite a few plumbing repairs of urban and rural networks. Separately, there is BGN 1.1 billion for rehabilitation under the National Plan for Recovery and Sustainability, another BGN 287 million for the second stage of the same program and nearly BGN 200 million for the rehabilitation of housing blocks in the municipalities affected by the green transition – Pernik , Stara Zagora and Kyustendil.
It is probably this considerable resource that caused interest in the industry in creating companies to participate in the numerous public procurements.
The profile of the Bulgarian construction market is such that it is dominated by small companies with up to 49 employees.
At least in terms of number, they occupy the largest share among all companies in the sector – 88%. (See the infographic)
And in terms of sales revenue, the smallest companies – those with assets up to BGN 19.5 million – occupy an even larger share – 97.3% of all. There are only 20 companies with assets of over BGN 97.5 million.
The massive creation of new companies has another explanation – a lot of jobs opened up this year. Only in the first half of 2024, 2,730 public contracts with the subject “Construction” were announced, the estimated value of which is BGN 5.7 billion. This is 18.2% more than the same period in 2023, but the average value of these orders is actually about 25% lower than last year. It is therefore understandable that municipalities currently hold the largest share of these procedures – 71.4%.
The other feature of public construction contracts at the moment is that the main source of their financing, at least for the first half of the year, is the state budget. 76.8% of them have a resource allocated by the state.
All operational programs, the recovery plan and other donor programs occupy only 23.2%.
Next year, this share will probably be higher, because then the big rehabilitation program will progress, but at least for the moment, investments in construction are mainly budget funds.
If one follows the economic results of the construction industry for the last decade, it can be seen that Dimitrov Day can be properly celebrated this year – according to NSI data
output in the sector was the highest since 2014
It is for BGN 10.197 billion for the six months only. (See the infographic) In addition to the growth compared to the same period of 2023 being 28.7%, this production is more than double compared to 10 years ago.
The growth continues for the second year in a row, and now, unlike before, the inflation factor does not have such a big impact.
The construction of facilities, which includes road, energy and plumbing construction, has even increased by 62.4% on an annual basis, and the unfreezing of the construction of the Mezdra – Botevgrad expressway, as well as the “Hemus” highway, played an indisputable influence on this. “.
These activities were on the back burner for over 2 years and work on them only resumed this spring.
The construction of buildings – mainly residential, which are financed with private funds, also has a significant share of 37.6% of the total construction activity.
Its annual growth is 17.4% and represents BGN 3.8 billion for the first six months of the year.