Construction volume down by 5% in the third quarter
According to Statistics Estonia, in the third quarter of 2023, the total production value of Estonian construction enterprises in Estonia and abroad decreased by 5% at constant prices compared with the third quarter of 2022. Considering only the domestic market, the fall in construction volume was 7%.
The total production value of construction enterprises was 1.2 billion euros, including 706 million euros’ worth of building construction and 462 million euros’ worth of civil engineering. Compared with the third quarter of 2022, the volume of building construction fell by a tenth, whereas the volume of civil engineering works (roads, bridges, port facilities, pipelines, communication and electricity lines, sports fields, etc.) rose by 4%.
Merike Sinisaar, leading analyst at Statistics Estonia, said that the construction market has been on a downward trend since the second quarter of 2022. The construction market continues to be affected by rising construction prices, higher interest rates, and declining consumer confidence.
The domestic construction market was primarily influenced by the decreased volume of building construction, which was mainly due to the decline in new building construction. The volume of new civil engineering increased, while the volume of repair and reconstruction works remained at the same level as last year.
Compared with the third quarter of the previous year, the construction volume of Estonian construction enterprises operating abroad grew by nearly a third. There was a rise in building construction as well as in civil engineering works completed abroad. Construction in foreign countries accounted for 7% of the total construction volume, up from 5% a year earlier.
According to the Register of Construction Works, 1,599 new dwellings were completed, which is 2% more than the year before. Nearly half of the completed dwellings are in Tallinn (40%), followed by the rural municipalities in the vicinity of Tallinn (28%), and Tartu county (16%).
The demand for new dwellings increased slightly in the third quarter, but due to the modest first half of the year, the number of building permits issued in three quarters was almost a quarter lower than in the same period last year. In the third quarter, building permits were issued for the construction of 1,555 dwellings, up 2% year on year. The most popular type of residential building was a block of flats.
The number of completed non-residential buildings was 253, with a useful floor area of 260,900 square metres. New storage, industrial, and commercial premises accounted for the biggest share of non-residential building construction. Compared with the third quarter of 2022, there was an increase in both the useful floor area and the volume of completed non-residential buildings.
Statistics Estonia collects and analyses data to produce the quarterly economic indicators of enterprises. The statistical activity is commissioned by the Ministry of Economic Affairs and Communications in order to understand how the Estonian economy is doing.
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