Modest beginning on the construction market

The construction market which had shown a rapid growth in recent years slowed down during 2007 and turned to the decline at the beginning of 2008. It was mainly caused by the decreased volumes in dwelling construction on domestic construction market. The construction market was influenced by recession, continuous increase in interest rates of settlement loans and a rise in construction prices.

In the 1st quarter of 2008 the production value of construction enterprises amounted to 7.3 billion croons, of which the production value of building construction was 5.4 billion kroons and the production of civil engineering totalled 1.9 billion kroons. Compared to the same period of 2007 the volume of building construction decreased 9%. At the same time the volume of civil engineering increased 17%. Although the volume of civil engineering grew, its influence on the construction activity was small, accounting for only a fourth of the total volume of construction. The beginning of the year was successful for construction enterprises operating in foreign countries. The construction volume in foreign countries increased more than a third compared to the same period a year ago.

According to the data of the Register of Construction Works, in the 1st quarter of 2008 the number of dwelling completions was 1,846, i.e. 461 dwellings more than in the same period of 2007. Similarly to the previous years, three quarters of completed dwellings were situated in blocks of flats. Since the second half of 2007 the demand for new dwellings has been continuously decreasing. In the 1st quarter of 2008 building permits were granted for the construction of 1,128 dwellings, which is about 2.5 times less compared to the same period of 2007. The most popular type of building was one-family dwelling.

In the 1st quarter of 2008, the number of completed non-residential buildings was 222 with the useful floor area of 227,000 square metres. The useful floor area of commercial and office buildings increased the most. Compared to the same period of 2007, the useful floor area and the cubic capacity of completed non-residential buildings decreased.

Trend of construction volume index, 1st quarter 2000 – 1st quarter 2008 (average of quarters of 2000 = 100)