Czech Republic building output down 4.4 pct in June

From the Prague Monitor:

Building output down 4.4 pct in June in 1st fall this yr


Building output in the Czech Republic fell by 4.4 percent year-on-year in June after a thirteen-month growth, the Czech Statistical Office (CSU) announced Monday.

Against May, seasonally adjusted building output dropped 0.2 percent.

"The decrease in construction output in June was affected by - a high growth of construction output in June 2006, increasing shortage of skilled building workers and problems in the market of certain building materials," the CSU said.

Next Finance analyst Vladimir Pikora ascribes the fall in output in particular to the high comparative base from last year when many people tried to avoid potential VAT growth for construction work and took mortgage loans.

The unusually warm winter allowed boom in construction in months when construction work is usually at low levels, he said.

"Thus, building material producers and sellers have empty warehouses as for some goods, which slows down construction and makes it more complicated. Moreover, building companies say they lack qualified staff," Pikora added.

From a broader viewpoint, it can be seen that the sector fares well, he said.

Average growth rate in the last twelve month stands at 13 percent and in the first half of this year, the sector grew by 12.7 percent.

Problems linked with the preparation of projects and their financing also took their toll, the CSU said.

In the second quarter, building output rose by 3.7 percent year-on-year, average registered workforce fell by 1.7 percent and average monthly nominal wage rose by 7.8 percent.

Planning and building control authorities granted 16.5 percent less building permits and the approximate value of the permitted constructions was 14.4 percent lower.

In June, new construction, reconstruction and modernisation recorded a 4 percent decrease, of which civil engineering work fell by 9.8 percent and building construction grew by 0.1 percent.

Repair and maintenance fell by 19.5 percent and other work recorded a drop of 47.2 percent. Construction work abroad grew by 53.3 percent.

Contracted construction work carried out by construction enterprises with 20+ employees fell by 4.7 percent year-on-year at constant prices.

The number of employees in construction enterprises with 20+ employees dropped by 2.2 percent against June 2006. Average monthly nominal wage of employees increased by 3.4 percent year-on-year and reached Kc21,124 (the real wage rose by 0.9 percent).

Average hourly wage grew by 9 percent year-on-year and stood at Kc137. Labour productivity per hour worked grew by 2.7 percent.

Planning and building control authorities granted 9,560 building permits in June 2007 (of which 5,258 for new constructions and 4,302 for renewals and enhancements). The number of building permits granted fell by 21.5 percent year-on-year.

Approximate value of constructions permitted in June 2007 increased by 7.3 percent in comparison to June 2006 and reached Kc28.3bn. New construction is valued at Kc20.3bn (up by 18.4 percent), the CSU said.

Planning and building control authorities permitted the construction of 3,369 dwellings, which was 334 dwellings fewer (-9.0 percent) than in June 2006. Out of that, 2,895 dwellings will be obtained by new construction and 474 dwellings by renewals and enhancements. The approximate value of newly permitted dwellings in multi-dwelling buildings was Kc7.2bn.

According to Eurostat News Release, seasonally adjusted construction output in the EU27 grew by 1.9 percent yr/yr in May 2007.

Among the EU member states for which data were available, the highest increases were observed in Slovenia (+48.7 percent), Romania (+27.6 percent) and Poland (+16 percent).

The biggest decreases were recorded in Portugal (-4.9 percent) and Germany (-2.7 percent).