Svaz: Construction could greatly help revive residential building

Prague - The revival of residential construction could significantly help the Czech construction industry. Jiří Nouza, president of the Czech Union of Construction Entrepreneurs, shared this with ČTK. Like companies, he identified the lack of workers and the lack of skilled tradesmen as the biggest current problems in the sector. According to him, it is not possible to clearly predict how the situation will evolve over the course of the year.

"What could significantly help is residential construction, which needs to be supported by all available means and to seek other possible funding methods for these investments in cooperation between the public and private sectors," Nouza stated.

The number of initiated apartment constructions in the Czech Republic last year increased year-on-year by 16.8 percent to 38,677. Compared to the pre-crisis year of 2007, it was 12 percent lower. In the mid-1970s, there were almost 100,000 annually, mostly in panel buildings.

Regarding further development, Nouza divided the construction industry into three parts. "About a quarter is made up of transportation and engineering construction under the Ministry of Transport. Here, the situation is very good; the budget of the State Fund for Transport Infrastructure is filled to its historically highest level of 126 billion crowns," he stated.

Approximately another quarter, according to him, pertains to constructions for which public clients, such as regions, cities, or municipalities, are responsible. This includes, for example, second and third class roads. "Here, we expect increased caution regarding the estimated tax collections, such as a reduction in the budgetary allocation of taxes and possibly restrictions on the investment activities of self-governing entities," Nouza added.

About half of the constructions, he said, fall under the private sector, where he also expects a higher degree of caution and restrictions on investments in hotel facilities, offices, retail, and manufacturing spaces. "If the investment appetite of the public sector can be maintained at a high level, it could help overcome a period of uncertainty and prevent a repetition of the scenario from 2009 and other years, when there was an unprecedented decline in construction," he noted.

He considers the lack of workers to be a long-term problem in the sector. "So far, we have no signals that the troubles of other sectors have led to increased demand for jobs in construction," Nouza added.

After a prolonged crisis between 2008 and 2013, construction has grown year-on-year five times in the last six years. Last year it rose by 2.7 percent, and the year before that even by 9.2 percent, the most since 2003. This year, over the first five months, it decreased year-on-year by 2.1 percent, and in May it fell by 7.6 percent. Analysts expect a decline in the sector this year of three to five percent.