Analysis of the construction sector - 2. quarter of 2008

In Q2 2008 construction output dropped year-on-year. The decrease was mainly due to building construction (the high comparative basis).

• Total construction output decreased by 1.3% compared to Q2 2007,
• building construction output fell by 5.7%,
• civil engineering output grew by 3.1%,
• average registered number of employees decreased by 1.0%,
• the average monthly nominal wage rose by 10.7%,
• the planning and building control authorities granted by 14.4% more building permits,
• approximate value of permitted constructions grew by 23.2%.

Construction output

Total construction output at constant prices was down by 1.3% year-on-year. Compared to Q2 2007, construction work volume decreased in new construction, reconstruction and modernisation, namely in building construction. All the other types of constructions recorded increases.


Construction output volume

Construction work valued at CZK 134 576 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 made by 2 444 enterprises with 20+ employees which carried out construction work priced at CZK 87 700 million, i.e. by 1.8% less than in Q2 2007.

CZK 74 617 million (-3.7%) was spent on new construction, reconstruction and modernization, and CZK 9 832 million (+9.8%) on repair and maintenance. Construction work abroad grew by 8.2%. Other work was up by 11.2%.

Over 90% of the output was produced by enterprises whose principal activity classified them to building construction and civil engineering (-3.0%). A small percentage (1.8%) but the highest rate of growth was recorded in enterprises engaged in building completion.

By size group of enterprises defined by number of employees, the only growth of construction work volume was recorded in medium enterprises. Construction output volume in the size group 50–99 employees rose by 3.2%.

By institutional sector (ISECTOR), a 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 2.1% and reached roughly CZK 85 billion.


Construction work carried out by enterprises’ own workers

The indicator construction work carried out by enterprises’ own workers grew by 2.3% in Q2 2008 and by 4.0% from the start of the year. The trend of relation between contracted construction work and construction work carried out by enterprises’ own workers probably indicates an increasing number of unfinished projects and delayed construction work invoicing.


Employment

The average registered number of employees working with construction enterprises employing 20+ persons in Q2 2008 was 158.5 thousand, of which 99.1 thousand were manual workers (-1.9%).
In total 126.2 thousand persons (-2.5%) worked in building construction and civil engineering; building installation employed 17.9 thousand persons (+3.0%) and building completion 5.7 thousand (+6.5%).


Wages

The average monthly nominal wage of employees in construction enterprises with 20+ employees reached CZK 23 745, which was by 10.7% more compared to Q2 2007. The hourly wage was CZK 153, i.e. up by 9.7%.
The average monthly wage in building construction and civil engineering reached CZK 24 132 (+10.6%); CZK 23 719 (+11.4%) in building installation and CZK 19 705 (+9.6%) in building completion.


Labour productivity

Labour productivity per employee in enterprises with 20+ employees decreased by 0.8%. Labour productivity per hour worked was by 1.7% lower than labour productivity per employee.


Building permits

The planning and building control authorities granted 32 824 building permits, which was by 14.4 more than in Q2 2007. There were 2 171 building permits granted in the Hl. m. Praha Region, of which 65% were for housing construction. Year-on-year increases were registered in environmental constructions (+30.8%), non-residential buildings (+18.1%), other constructions (+14.3%) and residential buildings (+7.8%).
In total 18 796 permits were granted for new construction (+20.8% year-on-year). Large increases were recorded in all types of constructions, namely environmental constructions (+37.9%), other constructions (+19.0%), non-residential buildings (+14.0%) and residential buildings (+13.6%).
The number of building permits for renewals and enhancements reached 14 028 (+6.9% year-on-year); the highest increase was recorded in non-residential buildings (+20.8%); a decrease of 11.1% was observed in environmental constructions.


Approximate value of constructions

The approximate value of constructions permitted in Q2 2008 was CZK 106.8 billion (+23.2% year-on-year). New construction will produce structures valued at CZK 79.4 billion (+27.7%). Renewals and enhancements will make available constructions worth CZK 27.4 billion (+11.8%).
The increase of approximate value was mainly due to building permits for new construction. By type of constructions, the approximate value of environmental constructions grew by 97.0%, of other constructions by 65.0%, of residential buildings by 25.8% and non-residential buildings by 1.3%.
As for renewals and enhancements, the approximate value of non-residential buildings grew by 29.6%, of residential buildings by 10.9% and of other construtions by 7.2%. A 56.8% decrease was observed in environmental constructions.


Floor space

In Q2 2008 the planning and building control authorities permitted buildings with a floor space of 2 557 thousand m ² to be constructed. The year-on-year increase was 9.6%; especially renewals and enhancements of non-residential buildings grew (+78.6%). Increase in residential buildings was by 19.1%; new construction grew by 19.0% and renewals and enhancements by 20.5%. The average floor space of a newly constructed dwelling was 125.5 m2 and approximate value CZK 19.9 thousand per 1m ².