The value of construction contracts in the 3rd quarter increased by 15.8 pct

Prague - The value of new construction contracts concluded in the third quarter increased year-on-year by 15.8 percent to 76.1 billion crowns. The monitored construction companies concluded 18,994 new contracts, representing a year-on-year decrease of 17.7 percent. This was stated today by the Czech Statistical Office.
    "Considering the reports of an economic slowdown, the continuing growth of contracts is good news," said ČSOB analyst Petr Dufek regarding the increase in contract values. At the end of the third quarter, the monitored construction companies had 16,200 contracts in the country with a total value of 209.4 billion crowns. They thus have a workload of approximately eight months.
    The value of newly concluded contracts for new construction, reconstructions, and modernization increased year-on-year by 17.5 percent to 69.1 billion crowns. The greatest contribution to the growth came from the value of new contracts for engineering constructions, which, like in the second quarter, was influenced by the construction of transportation infrastructure supported by European structural funds, the CSO reported.
    "If this trend can be maintained and enough funding from domestic and European funds is directed into infrastructure even in weak years, construction may be one of the sectors that helps the economy survive the upcoming weak period with solid results," noted Dufek.
    The value of new contracts for engineering constructions increased year-on-year by 39.3 percent. The value of new contracts for non-production non-residential buildings also increased, by 39.7 percent, as well as for water management constructions, which recorded a growth of 87.2 percent. On the other hand, the value of new contracts for residential buildings decreased year-on-year (by 14.6 percent) and for production non-residential buildings (by 14.7 percent).
    "The influence on the number and volume of contracts from private investors comes from banks, which have tightened criteria for providing loans for large projects. It is no longer the case that a developer receives up to 90 percent of the project funding from the bank," stated the CEO of Skanska Reality, Petr Fanta. According to Skanska CS spokesperson Ondřej Šucha, the number of contracts, for example, for large shopping centers is gradually decreasing, while the number of medium-sized projects is reportedly increasing.
    The average value of new construction contracts in the country was four million crowns, which was 40.8 percent more than in the third quarter of last year; of this, public contracts averaged 5.2 million crowns, while private contracts averaged 3.1 million crowns.
    Of the total financial volume of newly concluded contracts, 42.8 billion crowns were public and 33.3 billion crowns were private. However, the number of private contracts was higher than that of public contracts.
    Medium and large construction companies with 100 or more employees accounted for 87.4 percent of the total value of concluded contracts. The most significant share of 52.2 percent of the total value belonged to the group of companies with one thousand or more employees.
    According to the CSO, approximately four-fifths of the total number of concluded contracts in the third quarter will be completed within six months. Within one year, 93.9 percent of construction contracts will be realized. Of the total value of concluded contracts, just under half will be realized within six months, and 70.5 percent of the volume of contracts will be executed within one year.
    In the third quarter, 178 construction contracts with a total value of 1.4 billion crowns were canceled, the CSO reported.