Analysts: Construction in September was aided by a higher number of working days

Prague - The 2.9 percent growth in Czech construction in September was mainly supported by a higher number of working days compared to last year. After adjusting for this influence, the sector practically stagnated. It was primarily driven by residential construction. This was stated by analysts whom CTK contacted today. Last year, construction grew by 9.2 percent year-on-year. This year, analysts expect growth of three to four percent. They attribute the slowdown mainly to a lack of workers.

"Good weather and a higher number of working days compared to the previous year helped the construction output. The current statistics also confirm our positive outlook for the fourth quarter. The recovery was mainly evident in the construction of houses and apartments, which also grew year-on-year," said analyst František Táborský from Komerční banka.

According to ČSOB analyst Petr Dufek, construction companies did not lack new contracts, but the potential for further growth remains limited due to capacity reasons. "After adjusting for the influence of two additional working days, real production in the sector essentially stagnated. As earlier surveys indicated, the main reason is the lack of workers. And it seems that in some cases there is also a shortage of construction materials. For this reason, construction is one of the sectors with the fastest rising prices," added ČSOB analyst Petr Dufek.

UniCredit Bank analyst Pavel Sobíšek stated that companies are further reducing their foreign activity and focusing on domestic projects. "Nevertheless, construction is not in such condition that we could count on it as a driver of economic growth amidst the anticipated recession in industry," Sobíšek noted.

In the third quarter, building authorities issued 22,394 building permits worth approximately 100 billion crowns. According to BH Securities analyst Štěpán Křeček, these figures indicate that the pressure for construction is increasing in the Czech Republic. "Given the high prices in the real estate market in larger cities, people are building their own properties in their vicinity. However, this leads to complications in transportation," Křeček added.