Construction Slows To 7.5% In June: CSU

Prague, Aug 6 (CTK) – Czech construction slowed its annual hike to 7.5 percent in June from 10.1 percent in May, with building construction adding 6.7 percent and civil engineering growing by 9.6 percent in annual terms, the Czech Statistical Office (CSU) said today.


June this year was one working day shorter than last year, and construction added 8.9 percent adjusted for this effect.


After seasonal adjustment including the number of working days, building output was 0.2 percent higher in real terms on the month.


June’s figures show a relatively favourable trend, mainly in civil engineering, analysts said.


In June, seasonally-adjusted civil engineering registered the biggest annual increase since 2015, when the last EU funds had to be used, said Cyrrus chief analyst Lukas Kovanda. EU funding will also boost Czech construction this year, with the sector to see a solid growth rate of 10.5 percent, he said.


The number of dwellings started in June 2018 increased by 0.6 percent yr/y to 2,632. Jiri Schwarz, economist and supervisory board member at Expobanka bank, said prices of new homes are growing at a slower rate because of the increase in the number of homes whose construction has begun. Prices of homes are unlikely to stop rising in the foreseeable future in spite of toughening of conditions for provision of mortgage loans by the Czech National Bank that is hindering their growth, said Schwarz.


The number of completed dwellings fell by 5.8 percent annually to 2,353. The number of completed dwellings in family houses grew by 10 percent and the number of completed dwellings in multi-dwelling buildings went down by 20 percent, the CSU said.


In the first half of the year, builders launched the construction of 3,758 dwellings in blocks of flats, which was 5 percent more year on year and the highest figure for H1 since 2009, according to the CSU.


The number of dwellings started in single-family houses rose by 9.7 percent to 9,566 in H1, the highest number for H1 since 2008.


Broker Consulting property analyst Veronika Vranova said the June drop in the number of completed homes is a piece of bad news. Having in mind the stricter rules for mortgage provision taking effect in October, the second half of summer may see an increased demand for buying a new home under the current conditions, Vranova said.


The number of building permits granted decreased by 1.9 percent annually to 7,089 building permits. Their approximate value reached Kc32.3bn, being 13.9 percent higher compared to June 2017.


“The value of new contracts was the highest in ten years in both building construction, which shows a rise for a third consecutive year, and civil engineering which started to grow at the end of last year,” said CSU’s Petra Curinova.


The average registered number of employees in construction enterprises with 50+ employees fell by 1.7 percent yr/yr. Their average gross monthly nominal wage increased by an annual rate of 9.9 percent to Kc37,471.