Higher growth in the construction industry is hindered by the lack of employees, building materials and their high prices. For some companies, orders are so unprofitable that they prefer to withdraw from them. This was stated by analysts. According to the Czech Statistical Office, the construction industry slowed down year-on-year growth in July from 6.5 percent in June to 0.5 percent. Analysts expect growth in lower percentages for the whole year.
“Unlike industry, the construction industry recorded only a half percent year-on-year increase in July. This time the results of building construction were weaker, while civil engineering performed better. However, compared to June, construction results were generally weaker,” said ČSOB analyst Petr Dufek. Building construction, ie mainly the construction of houses, flats, industrial halls and warehouses, fell by 2.2 percent year on year in July. Civil engineering, which mainly consists of the construction of transport infrastructure, increased by 6.8 percent.
“The main problem of construction companies remains the lack of qualified and support staff, which does not allow the implementation of a mass of accumulated orders. conditions that are so unprofitable that they would rather withdraw from them,” Dufek added.
According to BH Securities analyst Štěpán Křeček, construction companies prefer to work on larger projects, which are often commissioned by the public sector. “On the contrary, smaller private contracts are being crowded out because they lack approved budgets. Construction companies are unable to meet approved budgets because materials are becoming more expensive. This can lead to the non-completion of many projects that run out of funds,” Křeček warned.
Komerční banka analyst František Táborský reminded that the July growth of 0.5 percent is the worst result in the last three months, but it is still well above the average of this year. “We expect the construction industry to grow by 4.1 percent this year. However, if the problems persist to the extent indicated by the July figures, the growth could be slightly lower,” Táborský added.
Source: CTK
