Dealing with construction permits in Bulgaria, Hungary, Romania

The World Bank has prepared its first Subnational Doing Business report on Bulgaria, Hungary and Romania entitled Doing Business in the European Union 2017: Bulgaria, Hungary and Romania. The report is based on the surveys conducted last year by involving respondents from 6 cities in Bulgaria, 7 cities in Hungary and 9 cities in Romania, measuring 5 indicators: starting a business, dealing with construction permits, getting electricity, registering property and enforcing contracts.

Source of table: World Bank. 2017. Doing Business in the European Union 2017: Bulgaria, Hungary and Romania. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO.

In this subnational research in Hungary, Ebuild Hungary (the parent company of Ebuild Romania, EECFA’ s Romanian member) was responsible for choosing the respondents from the private sector in Hungary on 2 of the 5 Doing Business indicators: dealing with construction permits and getting electricity. EECFA Research, Buildecon, was responsible for coordinating the project on these 2 indicators in the private sector in Hungary. Buildecon also completes the World Bank’s National Doing Business survey on dealing with construction permits in Hungary every year; a survey regarded as a benchmark for investors.

Here we are going to take a look at the key findings on the dealing with construction permits indicator* in Bulgaria, Hungary and Romania, what regional variations are, how the processes could be improved according to the report, why Germany is so efficient in getting building permits and how Hungary is trying to follow suit.

Key findings on getting construction permits

It has been concluded that overall, it is in Hungary where it is the easiest to obtain a construction permit for a warehouse (18 procedures) compared to Bulgaria (19 procedures) and Romania (26 procedures). However, all countries are lagging behind the EU average of 13 procedures.

In terms of the length of the permitting process, it is in Bulgaria where the process is the quickest: on average 141 days, and it is in Romania where it takes the longest time: 256 days. In Hungary it is 164 days, though it is better than the relative EU average of 169 days. There are 2 EU member states, the Slovak Republic and Cyprus, where the process is very long – 286 days and 507 days, respectively.

As far as costs of the construction permit are concerned, it is in Hungary where it is the cheapest to get a permit (0.5% of the warehouse value) and it is in Romania where it is the most expensive (3.4%). Bulgaria is only slightly cheaper (3.2%). By comparison, the EU average is 2.0%.

All three countries have been found to make building regulations available online and clearly specify the requirements for a building permit. Also, it has been concluded that all three countries have strong building quality control mechanisms and strict qualification requirements for professionals responsible for permitting approvals.

On the other hand, in comparison with the EU, the report has found that in all three countries the construction permit procedure is much more burdensome than in most other EU member states. Continue reading Dealing with construction permits in Bulgaria, Hungary, Romania

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EECFA 2017 Summer Construction Forecast and Revision

We have released our summer construction forecast on 16 June 2017 on Bulgaria, Croatia, Romania, Russia, Serbia, Slovenia, Turkey and Ukraine. This post intends to summarize the most important projections for these construction markets for the years 2017-2019. These are our main findings; for a deeper understanding, please consult our reports. You can contact us on eecfa.com.

Outlook for the EECFA regions

The highly optimistic outlook for South East Europe is maintained by EECFA. Leaving behind the transitory 2016, when the absorption of funds available in the new EU programming period (2014-2020) was still at a low level, the upcoming years are characterized by a bigger expansion of the construction market than that of GDP. Building construction is predicted to well outperform the total market, with a yearly average rate of 9% over the horizon. The small growth in the region’s total civil engineering market is attributed to the negative expectations in Romania.

Sideway moves, no further market expansion on the horizon are what we consider the most probable scenario for the 3 East European markets together. Turkey and Russia, being far the two biggest markets we cover in EECFA, is expected to show some similarities. In both countries our forecasts are moderately optimistic in the civil engineering market. While in the building construction market the outlook is clearly negative for Russia and neutral for Turkey. In Ukraine, the recovery experienced in 2016 is predicted to be sustained until 2019. Both building construction and civil engineering could expand further with a relatively good pace. Continue reading EECFA 2017 Summer Construction Forecast and Revision