Czech building output growth down at 8 % in April - CSU


06.06.2014 11:22

Prague - Czech building output slowed annual growth in April to 8 percent from a revised rise of 11.9 percent in March, and the number of started and completed homes went down annually, the Czech Statistical Office (CSU) said today.


ČSÚ: Růst stavební výroby v dubnu zpomalil na 8 pct ČTK ČTK

The number of building permits decreased and so did the approximate value of constructions.

The sector rose for the fifth time in a row. The April hike was due to a low comparison base, according to analysts.

Seasonally-adjusted building output was 1.3 percent higher in a month-on-month comparison.

Building construction increased by 2.7 percent on the year and civil engineering construction soared by 21.4 percent, statisticians said.  

The number of building permits was 5.7 percent lower on the year at 6,603. The approximate value of constructions fell by 10.2 percent to Kc22.8bn in annual terms.

The number of homes started in April declined by 18.5 percent to 1,800, and the number of completed homes reached 1,461, an annual decrease of 23.7 percent, statisticians said.

Czech construction is rebounding from the bottom this year, said Home Credit analyst Michal Kozub.

"After the relatively positive results from the first months of this year, which were ascribed mainly to seasonal factors, warmer weather and a low comparative base, convincing results have arrived that construction should already start reviving," he remarked.

However, CSOB analyst Petr Dufek points at the very poor results from April 2013.

"The very low comparative base from last year´s April, when output sank by 10 percent, cannot be ignored. We therefore do not want to overestimate the current construction data too much even when construction seems to be trying to rebound from the bottom," Dufek said.

Vaclav Matyas, president of the Association of Building Entrepreneurs, has a similar opinion.

"The figures may look positive but they have been influenced a lot by the exceptionally favourable weather this winter, the starting construction season and also a low comparative base," Matyas pointed out.

"Drastic measures of construction companies, which often reached the very bottom of their possibilities, are also mirrored in the data," he said, adding that the constantly decreasing number of employees in construction, which dropped by another 5.5 percent in April, is also a warning sign.

Evzen Korec, CEO and board chairman of developer Ekospol, is not optimistic, either.

"The current data are a cold shower for the sector. Construction does grow, but mainly thanks to the low comparative base from the past years. Everything else keeps falling," Korec stated.

"Fewer building permits are being issued, fewer flats are being completed and lay-offs continue. The whole sector resembles a patient who would die without life-support machines," he added.

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