Prague, Czech Republic – The construction industry in the Czech Republic is grappling with a substantial downturn, witnessing a year-on-year decline of 6.5% in November. This slump has intensified compared to October, with monthly production plummeting by 3.8%, as revealed by the Czech Statistical Office (ČSÚ). The adverse impact is notably pronounced in land construction.

Radek Matějka, the director of the Department of Statistics of Agriculture, Forestry, Industry, Construction, and Energy at ČSÚ, points out that the decline in production is partly attributed to weather conditions. November saw the highest rainfall since 1961, potentially impeding construction activities.

Land construction, encompassing building construction, took the most substantial hit, experiencing a year-on-year decrease of 7.7%. Engineering construction, which includes road construction, telecommunications, and energy networks, also faced a decline, dropping by 3.9%.

Throughout most of the preceding year, domestic construction production exhibited a year-on-year decline, with growth recorded only twice—in January and June. January witnessed a 5.3% increase, while June saw a modest rise of 0.9%. Conversely, declines were observed in the remaining months, with the most significant drop recorded in April at 7.1%.

In November, the issuance of building permits numbered 6,159, reflecting an 11.7% decrease compared to the same period the previous year. The approximate value of permitted constructions reached 41.9 billion crowns, indicating a marginal 0.2% increase compared to November 2022.

Housing construction commencement in November faced a decline, with statisticians reporting a 40.7% year-on-year drop in the number of flats under construction. The number of completed flats also decreased by 19.2%. Petra Cuřínová, the head of the Department of Construction and Housing Construction Statistics at ČSÚ, highlighted that the most significant impact on the overall decrease in completed flats was observed in the category of family houses. The construction sector in the Czech Republic grapples with multifaceted challenges, including weather-related impediments and broader economic factors, contributing to the observed contraction in November.

Article by Prague Forum