The growth rate of construction in July slowed to 6.1%

PRAGUE, September 6 - Construction production increased by 6.1 percent year-on-year in July. However, the growth rate slowed down from June's 19 percent. This year's July marked the end of a period when data on construction production were affected by the change in VAT on construction work last May, announced the Czech Statistical Office today. The change, however, did not concern residential construction.
The high growth in construction in the previous two months was caused by the fact that companies tried to report a maximum amount of construction work last year before the VAT change, so they could benefit from the reduced rate. This resulted in a low comparative base in May and June.
Month-on-month, seasonally adjusted construction production in July decreased by 0.5 percent in real terms, the Czech Statistical Office reported.
Construction is growing thanks to civil engineering works, mainly highways, while the volume of repairs and maintenance work declined, statisticians noted.
The number of employees in construction companies was 5.2 percent higher in July. The average monthly salary reached CZK 19,003, which is a two percent increase year-on-year, and real wages increased by 0.3 percent. On average, an employee of a construction company earned 140 crowns per hour, which is 8.5 percent more than last year. Labor productivity per employee increased by 0.3 percent.
In July, offices issued 12,393 construction permits, which is 4.8 percent fewer than last year. For new constructions, 6,636 permits were issued, and for changes to completed buildings, 5,757 permits were granted. The indicative value of the permitted constructions is higher even with a year-on-year lower number of permits.
It reached CZK 25.9 billion, which is almost two percent more than in July last year. Of this, new constructions account for CZK 15.6 billion.
Building authorities approved the construction of 4,034 apartments, which is 1,050 more than in July 2004. New construction will create 3,475 apartments, which is 1,127 more year-on-year. The indicative value of all newly permitted apartments in residential buildings was CZK 7.6 billion. The average acquisition cost of one apartment was CZK 2.1 million, which represents CZK 17,200 per square meter of usable area at an average apartment size of 119 square meters, according to the Czech Statistical Office.