Crisis Wipes Off Number of Bulgarian Construction Companies

The Bulgarian Construction Chamber forecasts a construction slump of over 20% in 2010, compared to 2009. File photo

The economic crisis has caused the liquidation of 1 100 construction businesses by October, 2010, the Chair of the Bulgarian Construction Chamber, Svetoslav Glossov, informs Monday.

These companies have not renewed their annual registration with the Central Professional Registry of Bulgarian Builders. 414 new companies, however, have submitted applications bringing the total number of construction businesses to 4 072.

Of those 1 100, almost two thirds were dealing with residential construction and most have been Sofia-based.

Data further shows that at the end of 2008, 263 000 people have been employed in the construction sector, compared to the current 142 000 with people with low qualifications making for the majority of the layoffs.

Glossov, however, points out that this is a "cleansing process" where the profiteers are disappearing, but the large, sound companies still stand, adding the sector remains in crisis mode, and it might see signs of recovery in the spring.

The Chamber forecasts a construction slump of over 20% in 2010, compared to 2009. (In 2009, the decline was 68% compared to 2008.)

The residential construction is showing minimum recovery with the most revival noted in road construction while companies are turning to infrastructure more and more over expectations of European funding for such projects in the next several years.

By October 20, the State has paid construction businesses about BGN 96 M for completed works and BGN 40 M are still pending, Glossov says, pointing out the current and the future State budgets do not provide funds for payments for outstanding State obligations.

In the last two months, many companies have abstained for applying for outstanding payments from the State through the Bulgarian Development Bank because this means receiving 7% less than what is due to them.

Just days ago, Financial Times published an article that investment in Bulgarian real estate, especially in beach and winter resorts is risky.

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