Czech construction industry fell by three percent last year

Prague - Czech construction dropped by 3.1 percent last year. In 2011, the number of apartments started was 2.1 percent lower than in 2010, and the number of apartments completed was 21.4 percent lower. This is evident from data provided by the Czech Statistical Office (ČSÚ). In December alone, production actually increased by 14.6 percent, likely due to the weather and the expected increase in VAT.
    The total value of newly awarded construction contracts in the country last year decreased by 12.2 percent year-on-year. Construction offices issued 1.4 percent more building permits last year, but their estimated value according to ČSÚ fell by 14.8 percent.
    The production of building construction recorded a year-on-year decline of 0.3 percent, while civil engineering fell by 8.7 percent. Construction production in 2011 decreased by 10.8 percent compared to the boom year of 2008.
    According to the president of the Association of Entrepreneurs in Construction in the Czech Republic, Václav Matyáš, the results from last year do not indicate that the situation in construction will significantly improve this year. "The Association of Entrepreneurs in Construction in the Czech Republic is trying to strongly alert the Czech government to the long-term decline in construction, but so far without any response. Instead of necessary growth measures, the ministry continues to cut back, and the same trend is likely to repeat itself this year," Matyáš stated.
    The number of construction contracts from construction companies with 50 or more employees increased by 18.1 percent year-on-year in 2011, with companies in the country concluding 47,007 contracts. The total value of these contracts fell by 12.2 percent year-on-year, amounting to 173 billion CZK.
    The average value of newly concluded construction contracts in 2011 was 3.7 million crowns, which was 25.6 percent lower year-on-year. By the end of 2011, construction companies with 50 or more employees had a total of over 10,000 contracts.
    The number of issued building permits increased by 1.4 percent year-on-year in 2011, with construction offices issuing 107,231 permits. The estimated value of these buildings amounted to 339.9 billion crowns, which represents a decrease of 14.8 percent compared to 2010.
    The unfavorable situation in construction, according to Matyáš, existentially threatens especially small and medium-sized construction companies. According to the Association of Entrepreneurs in Construction, large companies are also facing problems and have had to resort to significant savings measures and, in some cases, even lay off qualified employees.
    The average number of employees in construction companies with 50 or more employees decreased by 5.9 percent year-on-year last year. The average monthly nominal wage of these employees increased by 1.5 percent year-on-year, amounting to 29,206 CZK.
    In December alone, construction production increased by 14.6 percent year-on-year. After adjusting for the influence of the number of working days, it increased by 16.2 percent.
    "The results for December of last year are largely influenced by favorable weather, which allowed construction work to proceed without any limitations. The positive figure was also contributed to by the increase in VAT starting in January of this year," Matyáš added.