Analysis of the development of construction - 4. quarter of 2005

The growth of total construction output continued in 2005 and stood at 4.2% at constant prices. The rate of growth was slower than in 2004 when total construction output at constant prices rose by 9.7%. The growth rate in individual quarters of 2005 was differentiated (-3.2% in Q1, +0.1% in Q2, +7.3% in Q3 and +9.7% in Q4). In the second half of 2005 construction output figures ceased to mirror the influence of the change in VAT effective since 1 May 2004 (VAT on housing construction remained constant).
The growth of construction output was affected by:
 
-          the implementation of civil engineering works, especially highways, with more than 100 km being under construction;
-          the implementation of developer’s projects of foreign investors (particularly business centres and social hubs in large cities);
-          the continuing growth of the intensity of housing construction boosted by the expansion of mortgage-credit and saving-in-building-society markets and in the second half of the year also by the grants to young married couples.
 
Construction output structure

The basic characteristic of the market structure of construction was investment output (amounting to nearly three-fourths), i.e. goods with long life, in many cases 100 years and more.
New construction, including reconstruction and modernisation of investment nature, made up 72.7% of total output. It is divided into:
-          residential buildings 13.5% (multi-dwelling buildings, family houses, extensions thereto)
-          buildings designed for manufacture 16.4% (factory halls, buildings for agriculture, trade and transport)
-          buildings not designed for manufacture 13.4% (business centres, education, hospital or institutional care buildings, office buildings)
-          civil engineering works 28.3% (roads, highways, bridges, tunnels)
-          hydraulic engineering works 1.1% (dams, weirs, reservoirs on watercourses, locks) 
 
In the European context, the CR’s structure of construction output shows the following peculiarities:
-          a low proportion of housing construction (which gradually increases, though)
-          a low proportion of repair and maintenance
-          a high proportion of civil engineering
 
Repair and maintenance made up 24.8% of total output, other work 1.1% and work abroad 1.4%.

Construction output volume

Construction work worth CZK 422 737 million was done in 2005. The key enterprise base of the construction embraced 2 498 enterprises with 20+ employees and these carried out construction work worth CZK 290 672 million, i.e. by 5.1% more than in 2004.
  
From the view of the size structure of enterprises, the largest increase in construction work occurred in large enterprises with 500+ employees (+13.3%). Medium-sized enterprises recorded a decrease, which was biggest in enterprises with 100-249 employees (-6.1%). 
 
Labour productivity

Labour productivity in enterprises with 20+ employees measured by the volume of construction work per employee grew by 0.2% year–on–year. The highest rise in labour productivity was observed in enterprises with 500+ employees, in particular in enterprises employing 1000+ persons (+14.3%). Labour productivity decreased in enterprises with 20-249 employees, most in enterprises employing 100-199 persons (-9.5%).

Employment

Total employment in the construction (according to the LFSS) increased by 1.4% in Q4 2005, the number of employees rose and the number of the self-employed fell. Out of that, the employment in construction enterprises with 20+ employees grew by 4.9%. Over the year 2005, the number of employees went up to 161.6 thousand, of which manual workers involved in construction work made up 105.8 thousand (+4.8%). Broken down by region of the enterprise’s head office, the number of employees increased in the CR’s all regions, most in the Liberecký and Zlínský Regions (+7.6% and 7.4%, respectively) and least in the Karlovarský (+2.0%) and Jihomoravský Regions (3.8%).
 
Wages

In the year 2005, the average monthly wage of employees in construction enterprises with 20+ employees grew to CZK 18 923 (+3.8%), that of manual workers in the construction to CZK 15 300 (+2.5%). Broken down by region of the enterprise’s head office, the highest increases in the average monthly wage were registered in Prague (+6.1%) and in the Olomoucký Region (+5.5%), the lowest in the Karlovarský (+0.7%) and Zlínský (+1.4%) Regions. A decrease was observed in the Plzeňský Region (-0.3%).
 
Building permits

The planning and building control authorities granted 142 941 building permits in the year 2005, which was by 7.0% less than in 2004. The approximate value of newly permitted constructions reached CZK 325.8 billion, by 3.4% up on the year 2004 (CZK 72.8 billion in Q1, CZK 84.5 billion in Q2, CZK 91.6 billion in Q3 and CZK 76.9 billion in Q4 2005).
  
The higher volumes of the approximate values for non-residential buildings were due to the permits granted for large constructions of the transport infrastructure and shopping centres and social hubs.
Construction of 27 projects, each at the approximate value over CZK 1 billion, was permitted (mostly transport infrastructure constructions).
 
 
 
Housing construction

There were 41 628 dwellings permitted for construction by the planning and building control authorities in the year 2005, which was up by 4.2% year–on–year and most since 1993. New construction should provide 33 690 dwellings (+8.4%), predominantly in residential buildings. A total of 7 938 dwellings should be obtained through renewals and enhancements (-10.6%).
Of the total newly permitted dwellings, 38 711 will be built in residential buildings (+1 525 dwellings) and 2 917 in non-residential buildings. The total reflects an increase of 5.7% on the year 2004. They include, for example, dwellings in polyfunctional buildings, conversion of barracks and collective accommodation facilities into dwellings.
The approximate value of newly permitted dwellings in residential buildings reached CZK 80.3 billion, 4.2% up on the year 2004. The average acquisition value of a new dwelling in a new residential building thus amounts to CZK 2.2 million, as against CZK 1.1 million for a new dwelling obtained through renewal or enhancement.
 
Territorially and in the long run, most dwellings have been built in the surroundings of large cities, especially around Prague and in the Středočeský Region. In the year 2005, the construction of 17 527 new dwellings was started in these localities. The fewest dwellings will be erected in the Karlovarský Region (698) or, if related to the population, in the Ústecký and Moravskoslezský Regions.