Analysis of construction - 2. quarter of 2007

In the second quarter of 2007 the growth rate of construction output slowed down. This is attributable to deteriorated continuity of deliveries of certain building and insulating materials, insufficient availability of skilled workers and difficulties in preparation and financing of projects. As to the structure of construction work, a slowdown was recorded especially in civil engineering works due to a high comparable basis of the second quarter of 2006.
 

• Total construction output was by 3.7% higher than in the second quarter of 2006;
• Building construction contributed most to the growth (59% of the total volume);
• Average registered number of employees decreased by 1.7%;
• The average monthly nominal wage increased by 7.8%;
• The planning and building control authorities granted by 16.5% less building permits;
• Approximate value of permitted constructions was by 14.4% lower.

 
 
Construction output
 
            Total construction output at constant prices was up by 3.7% year-on-year (by 5.3% adjusted for seasonal effects) in the second quarter of 2007. Compared to the second quarter of 2006, construction work volume increased in new construction, reconstruction and modernisation, particularly in building construction where implementation was intensely in progress of developer projects of foreign investors focused mainly on industrial buildings, office buildings and multifunctional centres.
Construction work worth CZK 130 300 million was carried out in the second quarter of 2007. According to a CZSO estimate, small enterprises (up to 19 employees) produced more than third of the total construction output. The decisive basis of the construction sector was represented by 2 441 enterprises with 20+ employees which performed construction work priced at CZK 85 072 million, i.e. by 2.8% more than in the second quarter of 2006.
 
CZK 73 439 million (+2.6%) was spent on new construction, reconstruction and modernization, and CZK 8 529 million (-8.3%) on repair and maintenance. Construction work abroad grew by 74.3%. Other work was down by 35.7%.
 
Predominating part of the output (approx. 91%) was produced by enterprises whose principal activity classified them to building construction and civil engineering (growth by 1.7%). The highest rate of growth was recorded in enterprises engaged in building completion (+23.5%).
From the point of view of size group of enterprises defined by number of employees, construction work volume grew in small and medium enterprises (7.5% and 5.5% respectively) and decreased in large enterprises (-2.6%).

Broken down by institutional sector (ISECTOR), predominating part of output was produced by national private non-financial corporations and foreign controlled non-financial corporations where construction work volume grew by 2.6% and reached roughly CZK 83 billion.
 
Construction work carried out by enterprises’ own workers
  
Construction work carried out by enterprises’ own workers increased by 6.5% year-on-year in the second quarter of 2007. 


Employment
     
The average registered number of employees working with construction enterprises employing 20+ persons in the second quarter of 2007 was 160 thousand (by 1.7% less than in the second quarter of 2006), of which 101 thousand were manual workers (by 3.6% less). The number of white-collar workers rose by 1.9% (+1 092) as a result of increasing developer activities of large construction enterprises.
Employment decreased in more than half size groups of enterprises. The largest fall was registered in enterprises with 500 to 999 employees (-17.7%). The highest increase was observed in enterprises with 400 to 499 employees (+27.6%).
Building construction and civil engineering employed 129.4 thousand persons (-2.3%), building installation 17.3 thousand (-2.2%) and building completion 5.4 thousand (+3.0%). 
   
Wages
 
The average monthly nominal wage of employees in construction enterprises with 20+ employees reached CZK 21 454 in the second quarter of 2007, which was by 7.8% more year-on-year. Hourly wage was CZK 140, i.e. by 10.2% higher.
The highest wage increase occurred in enterprises with 400 to 499 employees (+12.4%) and the lowest in enterprises with 200 to 299 employees (+0.4%).
Average wage in building construction and civil engineering rose by 8.0% and reached CZK 21 801, in building installation by 9.0% (CZK 21 314) and in building completion by 7.2% (CZK 17 992). 
 
Labour productivity
 
Labour productivity per employee in enterprises with 20+ employees increased by 4.6% in the second quarter of 2007. As the number of hours worked decreased (-3.8%) year-on-year, labour productivity per hour worked grew faster than labour productivity per employee (+10.0%).
 
 
Building permits

The planning and building control authorities granted 28 682 building permits in the second quarter of 2007, which was by 16.5% less than in the second quarter of 2006. The only year-on-year increase (1.9%) was recorded in new construction of residential buildings. There were 2 548 building permits granted in Prague, of which 65% were for housing construction.


Approximate value of constructions
 
The approximate value of constructions permitted in the second quarter of 2007 was CZK 86.7 billion (-14.4% year-on-year). The decrease was affected by a high comparable basis when in May 2006 building permits with high approximate value were granted for modernisation and reconstruction in the energy sector and for highway construction. New construction will produce structures valued at CZK 62.2 billion (+9.0%). Renewals and enhancements will make available constructions worth CZK 24.5 billion (–44.6%).
By type of constructions, the largest decreases of approximate value were registered for non-residential buildings (-14.1%), other constructions (-31.8%) and environmental constructions (-12.9%). Approximate value of residential buildings grew by 1.7%.
 
Floor space
    
In the second quarter of 2007 the planning and building control authorities permitted construction of buildings with a floor space of 2 334 thousand m ². A year-on-year increase was observed especially for non-residential buildings; increase in residential buildings was 0.5%. The floor space of newly constructed residential buildings increased by 21.2% and of renewals and enhancements dropped by 24.4%. The average floor space of a newly constructed dwelling was 131.0 m ² and approximate value CZK 18.8 thousand per 1m ².