Analysis of the construction sector - 3. quarter of 2008

In Q3 2008 construction output increased year-on-year.
The fall in building construction was compensated for by growth in civil engineering. The high approximate value of permitted constructions made order books full for the next period.

• Total construction output increased by 4.9% compared to Q3 2007,
• building construction output fell by 4.9%**) In enterprises with 20+ employees),
• civil engineering output grew by 20.4%*),
• average registered number of employees decreased by 1.0%*),
• average monthly nominal wage rose by 10.2%*),
• building permits granted by the planning and building control authorities increased by 4.1%,
• approximate value of permitted constructions grew by 16.7%.

Construction output

Total construction output at constant prices was up by 4.9% year-on-year. Working days adjusted (WDA) output rose by 2.8% year-on-year (Q3 2008 had by four working days more than Q3 2007). Compared to Q3 2007, construction work volume increased in new construction, reconstruction and modernisation in civil engineering. In contrast, building construction showed a sustained decrease. Increases were recorded in the other types of constructions (repair and maintenance, other work), except for construction work abroad where output dropped by 4.1%.


Construction output volume

Construction work valued at CZK 153 574 million was carried out. According to a CZSO estimate, small enterprises (up to 19 employees) produced nearly a third of the total construction output. The core of the construction sector was made by 2 483 enterprises with 20+ employees which carried out construction work priced at CZK 106 123 million (+4.7% year-on-year).

CZK 89 607 million (+3.4%) was spent on new construction, reconstruction and modernization, and CZK 12 978 million (+17.7%) on repair and maintenance. Construction work abroad decreased by 4.1%. Other work was up by 39.0%.

Over 90% of the output was produced by enterprises whose principal activity classified them to building construction and civil engineering (+3.8%). The share in total output of enterprises engaged in building completion was 1.9% (+21.6%).

By size group of enterprises defined by number of employees, growth of construction work volume was recorded in small, medium and large enterprises. The highest growth (+10.7%) was observed in the size group 50–99 employees.

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 the construction work volume grew by 9.9% (at current prices) and reached roughly CZK 104 billion.


Construction work carried out by enterprises’ own workers

The indicator construction work carried out by enterprises’ own workers grew by 7.6% in Q3 2008 and by 5.2% from the start of the year.


Employment

The average registered number of employees working with construction enterprises employing 20+ persons was 161.7 thousand, of which 101.7 thousand were manual workers (-1.5%).
In total 128.6 thousand persons (-1.8%) worked in building construction and civil engineering; building installation employed 18.1 thousand persons (+0.2%) and building completion 6.1 thousand (+4.2%).


Wages

The average monthly nominal wage of employees in construction enterprises with 20+ employees reached CZK 24 246 (+10.2% year-on-year). The hourly wage was CZK 160 (+5.7%).
The average monthly wage in building construction and civil engineering reached CZK 24 585 (+9.4%); CZK 24 576 (+14.4%) in building installation and CZK 20 626 (+13.3%) in building completion.


Labour productivity

Labour productivity per employee in enterprises with 20+ employees increased by 5.7%. Due to year-on-year rise of hours worked by 3.2% labour productivity per hour worked grew less rapidly than labour productivity per employee (+1.5%).


Building permits

The planning and building control authorities granted 33 820 building permits, which was by 4.1 more than in Q3 2007. Year-on-year increases were registered in other constructions (+10.9%), non-residential buildings (+6.5%) and environmental constructions (+5.6%); a decrease was recorded in residential buildings (-1.8%). There were 2 235 building permits granted in the Hl. m. Praha Region, of which 60.9% were for housing construction.
In total 19 823 building permits were granted for new construction (+5.9% year-on-year). Increases were observed in all types of constructions, namely environmental constructions (+8.2%), other constructions (+7.2%), residential buildings (+4.9%) and non-residential buildings (+0.2%).
The number of building permits for renewals and enhancements reached 13 997 (+1.7% year-on-year); increases was recorded in other constructions (+21.9%) and non-residential buildings (+10.9%); decreases in environmental constructions (-11.6%) and residential buildings (-6.7%).


Approximate value of constructions

The approximate value of constructions permitted in Q3 2008 was CZK 105.8 billion (+16.7% year-on-year). New construction will produce structures valued at CZK 69.8 billion (+18.6%). Renewals and enhancements will make available constructions worth CZK 36.0 billion (+13.3%).
Approximate value increase was mainly due to building permits for new construction. By type of constructions, approximate value grew by 50.5% year-on-year in environmental constructions, by 40.2% in other constructions, by 14.0% in non-residential buildings and by 5.3% in residential buildings.
In renewals and enhancements, approximate value grew by 80.5% in non-residential buildings and by 75.5% in environmental constructions. Decreases by 17.8% and 9.7% were recorded for other constructions and residential buildings respectively.
Eight constructions of approximate value in excess of CZK 1 billion were permitted in Q3 2008. They are predominantly transport infrastructure projects and extensions to industrial buildings.


Floor area

In Q3 2008 the planning and building control authorities permitted buildings with a floor area of 2 414.2 thousand m ² to be constructed. The year-on-year decrease was 2.7%. The floor area of residential buildings fell by 0.8%; up by 0.5% in new construction and down by 15.7% in renewals and enhancements. The floor area of non-residential buildings decreased by 5.3%; down by 6.3% in new construction and up by 43.5% in renewals and enhancements. The average floor area of a newly constructed dwelling was 126.8 m2 and approximate value CZK 20.7 thousand per 1m ².