Analysts: Construction output in the Czech Republic is slowly returning to normal

Prague – Construction output in the Czech Republic is slowly returning to normal. Although the sector is performing well in the short term, its longer-term trajectory is causing concern among analysts contacted by the Czech News Agency (ČTK). The situation is complicated primarily by a shortage of construction workers and rising prices of building materials. According to the analysts, construction output in September was driven by civil engineering, namely transport and energy projects. Over the first three quarters, however, output growth was driven mainly by building construction.

Construction output in the first three quarters rose by 2.6 percent year on year, according to data released today by the Czech Statistical Office (ČSÚ). Building construction contributed to this growth, increasing by 5.3 percent year on year. Civil engineering output, by contrast, fell by 2.4 percent. All three quarters recorded year-on-year growth in construction. Construction companies with 50 or more employees signed 49,244 construction contracts over the three quarters, up 3.9 percent year on year. Their total value fell by 4.7 percent to CZK 313 billion. A total of 48,147 building permits were issued, an increase of 5.1 percent year on year. The number of completed construction projects fell by 13.4 percent year on year.

According to Komerční banka economist Jan Vejmělek, September's growth in civil engineering was driven primarily by public construction projects, which fluctuate considerably in the month-on-month statistics. "Following last year's construction boom, the sector is returning to normal this year. While real construction output grew by 10.7 percent in 2025, we expect growth of 2.5 percent this year and a slightly higher 2.7 percent next year," Vejmělek added.

According to Creditas bank economist Petr Dufek, civil engineering output remains roughly 14 percent above its 2019 level, while building construction is 5.4 percent higher. Despite a noticeable decline in new civil engineering contracts, the situation can be expected to improve gradually in this segment as well. "The short-term outlook for construction remains favourable, but the longer-term outlook is more mixed. The main risks continue to be shortages of both skilled and unskilled workers and rising prices of building materials," Dufek said.

Jan Slabý, an expert at consultancy Ecovis, also agrees that the sector faces a labour shortage. In his view, the limited capacity of construction companies is the biggest constraint on the industry as a whole. "Combined with high construction costs, expensive materials and restrictive interest rates, these constraints continue to prevent larger new projects from getting off the ground more quickly," Slabý said.

Vejmělek also pointed out, however, that employment in the sector is still growing. Over the first nine months, it was up by an average of 2.1 percent year on year, while the average wage rose by 4.9 percent.