Analysis of the construction sector - 1. quarter of 2008

In Q1 2008 the construction sector was largely affected by favourable weather conditions and allocation of money for road and highway infrastructure. This enabled the builders to carry out smoothly all construction work.

• Total construction output grew by 4.2% compared to Q1 2007.
• The growth was mainly affected by civil engineering.
• Average registered number of employees increased by 0.6%.
• The average monthly nominal wage rose by 13.8%.
• The planning and building control authorities granted by 1.2% more building permits.
• Approximate value of permitted constructions was by 12.0% higher.

Construction output

In Q1 2008 total construction output at constant prices was up by 4.2% year-on-year. Compared to Q1 2007, construction work volume increased nearly in all types of constructions, in particular in civil engineering.
The growth was affected especially by continuing construction of roads and highways incl. reconstruction and modernisation of railways and intersections.


Construction output volume

In Q1 2008 construction work valued at CZK 98 175 million was carried out. According to a CZSO estimate, small enterprises (up to 19 employees) produced more than a third of the total construction output. The core of the construction sector was represented by 2 358 enterprises with 20+ employees which carried out construction work priced at CZK 59 992 million, i.e. by 3.8% more than in Q1 2007.

CZK 52 678 million (+3.3%) was spent on new construction, reconstruction and modernization, and CZK 4 985 million (+1.3%) on repair and maintenance. Construction work abroad grew by 22.6%. Other work was down by 7.4%.

A predominating part of the output (approx. 90%) was produced by enterprises whose principal activity classified them to building construction and civil engineering (+3.1%). A small part (1.9%), but the highest rate of growth was recorded for enterprises engaged in building completion.

By size group of enterprises defined by number of employees, growth of construction work volume was recorded in medium and large enterprises. The volume of construction output rose by 12.6% in the size group 250–499 employees and by 7.2% in the size group 500+ employees.

By institutional sector (ISECTOR), predominating part of the output was produced by national private non-financial corporations and foreign controlled non-financial corporations where construction work volume grew by 2.5% and reached roughly CZK 58 billion.


Construction work carried out by enterprises’ own workers

The indicator construction work carried out by enterprises’ own workers, which grew by 6.6% in Q1 2008, followed the trend of contracted construction work.


Employment

The average registered number of employees working with construction enterprises employing 20+ persons in Q1 2008 was 154.5 thousand, of which 95.0 thousand were manual workers (by 0.3% less).
Employment decreased in less than half size groups of enterprises. The largest decrease was registered in enterprises with 300–399 employees (-8.4%). The highest employment increase was recorded in enterprises with 500–999 employees (+11.0%).
In total 122.8 persons were working in building construction and civil engineering (-1.0%), building installation employed 17.6 thousand persons (3.3%) and building completion 5.5 thousand (8.6%).


Wages

In Q1 2008 the average monthly nominal wage of employees in construction enterprises with 20+ employees reached CZK 22 915, which was by 13.8% more year-on-year. The hourly wage was CZK 160, i.e. by 13.3% higher.
The average monthly wage grew in all size groups of enterprises, the most in enterprises with 400–499 employees (+26.4%), the least in enterprises with 500–999 employees (+7.9%).
Average monthly wage in building construction and civil engineering reached CZK 23 511 (+15.4%), in building installation CZK 22 200 (+8.3%) and in building completion CZK 18 608 (+7.9%).


Labour productivity

In Q1 2008 labour productivity per employee in enterprises with 20+ employees increased by 3.2%. Labour productivity per hour worked grew slower than labour productivity per employee (by 2.8%).


Building permits

In Q1 2008 the planning and building control authorities granted 26 329 building permits, which was by 1.2% more than in Q1 2007. There were 2 298 building permits granted in the Hl. m. Praha Region, of which 60% were for housing construction.
The most building permits were granted for other constructions, which increased by 14.1% year-on-year. Building permits for residential buildings and renewals and enhancements fell by 3.8% and 5.8% respectively year-on-year.


Approximate value of constructions

The approximate value of constructions permitted in Q1 2008 was CZK 90.9 billion (+12.0% year-on-year). New construction will produce structures valued at CZK 59.8 billion (+2.0%). Renewals and enhancements will make available constructions worth CZK 31.1 billion (+38.2%).
By type of constructions, approximate value of building permits for new construction of residential buildings and other constructions increased by 8.8% and 1.7% respectively. The approximate value of environmental constructions dropped by 10.9%. The largest contributors to the growth of approximate value were renewals and enhancements, which doubled, and non-residential buildings (+35.1%). Residential buildings remained unchanged. The highest decrease (-40.6%) was recorded for environmental constructions.


Floor space

In Q1 2008 the planning and building control authorities permitted buildings with a floor space of 2 181 thousand m ² to be constructed. The year-on-year increase was 20.8%; especially floor space of non-residential buildings (+52.8%) and newly constructed non-residential buildings (+55.8%) grew. The floor space of residential buildings dropped by 2.5%, floor space of newly constructed residential buildings decreased by 1.2% and floor space of renewals and enhancements of residential buildings fell by 16.2%. The average floor space of a newly constructed dwelling was 114.5 m ² and approximate value CZK 20.2 thousand per 1m ².