The decline in construction production continued in the 3rd quarter

The construction market which had shown only growth since 2000 turned to the decline at the beginning of 2008 because the unsatisfactory demand and complicated financing conditions. A present situation on the construction market is similar to the year 1999 when due to the recession the construction enterprises suffered the most.

In the 3rd quarter of 2008 the production value of construction enterprises amounted to 9.9 billion kroons, of which the production value of building construction was 5.9 billion kroons and the production of civil engineering totalled 4.0 billion kroons. Compared to the same period of 2007 the volume of building construction decreased more than a fifth and the volume of civil engineering 3%. It was mainly caused by the decreased volumes in dwelling construction on domestic construction market.

Contrary to the domestic construction market which is on decline stage, in the 3rd quarter the construction volume in foreign countries increased 15% compared to the same period a year ago. The growth was caused by the building construction as well as civil engineering. Although the construction in foreign countries increased, its influence on the construction activity was very small, accounting only for 6% of the total volume of construction.

According to the data of the Register of Construction Works, in the 3rd quarter of 2008 the number of dwelling completions was 1,024, i.e. 454 dwellings less than in the same period of 2007. Similarly to the previous years, about three quarters of completed dwellings were situated in blocks of flats. The recession and the restricted loan terms decreased continuously the demand for new dwellings. In the 3rd quarter of 2008 building permits were granted for the construction of 1,030 dwellings, which is about half less compared to the same period of 2007. The most popular type of building was one-family dwelling.

In the 3rd quarter of 2008, the number of completed non-residential buildings was 232 with the useful floor area of 261,300 square metres. The useful floor area of commercial, industrial and storage buildings increased the most. Compared to the same period of 2007, the useful floor area and the cubic capacity of completed non-residential buildings increased.

Trend of construction volume index, 1st quarter 2000 – 3rd quarter 2008

(average of quarters of 2000 = 100)