Construction Output Falls by Nearly Seven Percent

The year-on-year decline in construction output in the Czech Republic accelerated to 6.8 per cent this May after a slowdown in April, according to the Czech Statistical Office (ČSÚ). In civil engineering, including the construction of roads, telecommunications and energy networks, production fell by 6.3 per cent compared to May last year. In building construction, which encompasses the construction of buildings, output decreased by 7.1 per cent. Monthly construction production in May dropped by 5.1 per cent.

The number of completed apartments in May was 2,905, representing a year-on-year decrease of 2.1 per cent. This decline was influenced by categories such as converting residential and non-residential buildings while more new family and apartment buildings were completed. “In May, 2,819 apartments began construction, which is 18.2 per cent less than last year,” said Drahomíra Dušková from the Department of Construction and Housing Statistics at ČSÚ.

The value of constructions also decreased. For all constructions for which building permits were issued in May, the total reached 52.5 billion crowns, a year-on-year decrease of 9.2 per cent. Construction output in the Czech Republic only increased year-on-year in February this year, while it declined in other months. Last year, it mostly decreased year-on-year, with ČSÚ noting growth in construction only in January and September.

The data suggests a challenging period for the construction industry in the Czech Republic, with significant decreases in the number of new projects and their value. The continuous decline indicates potential issues in the sector that may require attention from industry stakeholders and policymakers. The decrease in civil engineering projects, in particular, could have broader implications for infrastructure development in the country.

The slowdown in construction activity can be attributed to various factors, including economic conditions, regulatory changes, and shifts in market demand. The reduced number of new projects and the lower value of issued building permits highlight the need for strategic planning and investment to stimulate growth in the sector.

As the construction industry is a critical component of the national economy, analysts and policymakers closely monitor its performance. Recent trends underline the importance of addressing the underlying issues to ensure the sustainable development of the construction sector in the Czech Republic.