Analysis of the construction sector - 4. quarter of 2008

In Q4 2008 construction output decreased year-on-year. The fall in building construction was compensated for by the growth in civil engineering.

• Total construction output decreased by 3.4% compared to Q4 2007,
• building construction fell by 11.7%*)
• civil engineering grew by 9.8%*),
• average registered number of employees decreased by 0.5%*),
• average monthly nominal wage rose by 12.2%*),
• building permits granted by the planning and building control authorities decreased by 3.1%,
• approximate value of permitted constructions dropped by 12.0%.

Construction output

In Q4 2008 total construction output at constant prices was down by 3.4% y-o-y. Working days adjusted (WDA) output dropped by 2.6% (Q4 2008 was by two working days shorter than Q4 2007). Compared to Q4 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 repair and maintenance and other work, and a decrease in construction work abroad (-25.3%).

In the year 2008 total construction output was up by 0.6% and reached CZK 536 570 million. Civil engineering grew y-o-y, building construction decreased.

In Q4 2008 construction work worth CZK 151 227 million was carried out. According to a CZSO estimate, small enterprises (up to 19 employees) produced roughly a fourth of the total construction output. The core of the construction sector was made by 2 510 enterprises with 20+ employees which carried out construction work valued at CZK 113 201 million (-3.9% year-on-year).

CZK 93 979 million (-3.4%) was spent on new construction, reconstruction and modernization, and CZK 15 239 million (+1.9%) on repair and maintenance. Construction work abroad fell by 25.3%. Other work grew by 7.8%.


Most of the output was produced by enterprises whose principal activity classified them to building construction and civil engineering (-3.4%). The share in total output of enterprises engaged in building completion was 2.0% (+12.6%).

By size group of enterprises (number of employees), decreases of construction work volume were recorded in small (-2.0%), medium (-9.2%) and large (-1.1%) enterprises.

By institutional sector (ISECTOR), a predominating part of the output was produced by national private non-financial corporations and foreign controlled non-financial corporations whose construction work volume grew by 0.8% (current prices) and reached roughly CZK 111 billion.


Construction work carried out by enterprises’ own workers

The indicator construction work carried out by enterprises’ own workers was down by 2.9% in Q4 2008 and up by 2.5% in the year 2008.


Employment

In Q4 2008 the average registered number of employees working with construction enterprises employing 20+ workers was 160.7 thousand, of which 99.9 thousand were manual workers (-1.0%).
In total 127.9 thousand employees (-0.9%) worked in building construction and civil engineering: 18.2 thousand in building installation (+0.9%) and 6.1 thousand in building completion (+3.2%).
In the year 2008 the average registered number of employees working with construction enterprises employing 20+ workers decreased by 0.5% and reached 158.8 thousand. Employment in building construction and civil engineering was down by 1.5%.


Wages

In Q4 2008 the average monthly nominal wage of employees in construction enterprises with 20+ employees reached CZK 26 887 (+12.2% y-o-y). The hourly wage was CZK 191 (+15.8%).
The average monthly wage in building construction and civil engineering reached CZK 27 469 (+12.3%); CZK 26 444 (+11.5%) in building installation and CZK 22 537 (+16.6%) in building completion.

In the year 2008 the average monthly nominal wage was CZK 24 448 (+11.6% y-o-y). The monthly wage of manual workers grew by 9.8%. The average hourly wage of employees reached CZK 166 (+10.9%).


Labour productivity

In Q4 2008 labour productivity per employee in enterprises with 20+ employees decreased by 3.3%. Labour productivity per hour worked reached CZK 1 667 (-0.3% y-o-y, constant prices).
In the year 2008 labour productivity per employee in enterprises with 20+ employees grew by 0.6%. Labour productivity per hour worked was CZK 1 304 (+0.1% y-o-y).


Building permits

In Q4 2008 the planning and building control authorities granted 29 269 building permits, which was by 3.1% less against Q4 2007. Y-o-y increase was registered for non-residential buildings (+3.1%), decreases occurred in environmental constructions (-15.1%), residential buildings (-2.3%) and other constructions (-0.2%).
In total 16 973 building permits were granted for new construction (-4.3% y-o-y). Increases were observed in residential buildings (+4.3%) and non-residential buildings (+4.2%), decreases in other constructions (-5.0%) and environmental constructions (-14.9%).
The number of building permits for renewals and enhancements reached 12 296 (-1.3% year-on-year); increases were recorded in other constructions (+16.4%) and non-residential buildings (+2.5%); decreases in environmental constructions (-16.5%) and residential buildings (-7.0%). In the year 2008 the number of building permits granted rose by 4.1% y-o-y and reached 122 242. Decreases were recorded in the Olomoucký Region (-11.9%), Karlovarský Region (-0.8%) and Hl. m. Praha Region (-8.3%); all the other regions reported increases. The number of building permits grew in all construction categories, i.e. other constructions (+9.3%), non-residential buildings (+8.9%), environmental constructions (+0.6%) and residential buildings (+0.2%). The growth in the year 2008 was mostly affected by building permits for new constructions, namely other constructions (+9.8%), residential buildings (+5.8%), environmental constructions (+5.3%) and non-residential buildings (+3.9%). Building permits for renewals and enhancements grew in non-residential buildings ((+12.0%) and other constructions (+7.7%).


Approximate value of constructions

The approximate value of constructions permitted in Q4 2008 was CZK 87.3 billion (-12.0% y-o-y). New construction will produce structures valued at CZK 60.4 billion (-3.6%). Renewals and enhancements will make available constructions worth CZK 26.9 billion (-26.4%).
Approximate value of building permits for new construction grew in environmental constructions (+77.6%); decreases were observed in non-residential buildings (-16.4%), residential buildings (-11.7%) and other constructions (-5.6%). The fall of approximate value was mostly affected by building permits for renewals and enhancements, namely environmental constructions (-69.5%), other constructions (-38.9%) and non-residential buildings (-22.8%). It rose in residential buildings (-5.5%).

In the year 2008 the approximate value of permitted constructions was CZK 390.8 billion (+9.3% y-o-y). Approximate value grew in all construction categories, namely in environmental constructions (+26.3%), other constructions (+12.9%), non-residential buildings (+7.0%) and residential buildings (+5.0%).
Approximate value of building permits for new construction increased by 11.2%, namely in environmental constructions (+52.7%), other constructions (+22.6%) and residential buildings (+6.1%). It fell in non-residential buildings (-0.6%). Approximate value of building permits for renewals and enhancements grew by 5.2%, namely in non-residential buildings (+21.3%) and residential buildings (+1.3%). Decreases were recorded in environmental constructions (-41.6%) and other constructions (-1.1%).
Twenty-four constructions of approximate value in excess of CZK 1 billion were permitted. They are predominantly transport infrastructure projects, industrial buildings and warehouses, office buildings.


Floor area

In Q4 2008 the planning and building control authorities permitted buildings with a floor area of 1 866.5 thousand m ² to be constructed (-24.0% y-o-y). The floor area of residential buildings fell by 12.0%; down by 13.0% in new construction and up by 0.9% in renewals and enhancements. The floor area of non-residential buildings decreased by 36.3%; down by 36.5% in new construction and down by 29.1% in renewals and enhancements. The average floor area of a newly constructed dwelling was 123.4 m ² and approximate value CZK 21.5 thousand per 1m ².

In the year 2008 the planning and building control authorities permitted the construction of buildings with a floor area of 9 019.2 thousand m ² (-0.6% y-o-y). The floor area of residential buildings grew by 0.9%; up by 1.2% in new construction and down by 2.8% in renewals and enhancements. The floor area of non-residential buildings dropped by 2.4%. The average floor area of a newly constructed dwelling was 123.0 m ² and approximate value CZK 20.5 thousand per 1m ².

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*) In enterprises with 20+ employees),