Construction increased by 3.5 percent in October after a decline in September

Prague - Construction output in October increased year-on-year by 3.5 percent, excluding the influence of working days, it rose by two percent. This was announced today by the Czech Statistical Office. Month-on-month, construction production adjusted for seasonal influences was up by 0.9 percent. In September, construction production fell year-on-year by 1.8 percent. According to some analysts, the October results, despite the reported growth, suggest that the construction boom is losing momentum.
    "After the decline in September, construction returned to growth, however, the October result confirmed that the rapid growth of construction output is a thing of the past due to significant capacity constraints, so growth can be expected to remain at a maximum of five to six percent," commented Komerční banka analyst Eva Zamrazilová on the results.
    The indicative value of approved constructions increased in October by 9.9 percent year-on-year to 32.8 billion CZK. According to Zamrazilová, the planned increase in VAT rates in January was reflected in the growth of the indicative value of newly approved constructions.
    The October growth in construction production was primarily supported by building construction, where new construction, modernization, and reconstruction grew most significantly, particularly the construction of new apartments. Construction production increased in all monitored areas of construction except for engineering construction and other works, the CSO reported.
    The number of employees in construction companies with 20 or more people fell by 2.2 percent compared to last October. The average nominal monthly wage increased by 8.6 percent to 22,922 CZK. The average hourly wage rose by 5.5 percent to 137 crowns.
    In October, building authorities issued 11,217 building permits, of which 6,610 were for new constructions and 4,607 for changes to completed works. The number of building permits fell by 18.6 percent year-on-year.
    Authorities permitted the construction of 5,111 apartments in October, which was 1,244 more than in October 2006. Of these, 4,488 apartments will be created through new construction and 623 apartments through changes to completed works. The indicative value of newly approved apartments in apartment buildings was 10.6 billion CZK.
    Zamrazilová estimates that the annual growth of Czech construction will be around six percent this year. She estimates the same result for 2008, when the main driving force of the construction industry should be the construction of transport infrastructure.
    In EU countries, according to Eurostat data, construction output, adjusted for the influence of the number of working days, increased year-on-year by 2.5 percent in September, of which building construction rose by 2.5 percent and engineering by 2.4 percent. Among the member states for which data were available, construction output increased the most in Romania by 37.5 percent, in Slovenia by 4.6 percent, and in Slovakia by 3.7 percent. Construction output declined the most in Sweden by ten percent, in Portugal by 4.7 percent, and in Germany by 2.2 percent.