Survey: Czech builders improve outlook for this year, estimate 2.6 pct decline

by   CIJ News iDesk III
2023-03-23   10:31
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Builders have slightly improved their outlook for this year. While last fall they predicted a 4.6 percent decline for 2023, they now estimate a 2.6 percent drop. A larger decline of 3.2 per cent is expected in civil engineering, i.e. the construction of residential and non-residential buildings, due to a number of unfavourable economic factors.

"The directors of construction companies confirm the declining forecast of the construction market from the previous period. The slight easing of expectations is due to diminishing concerns about the receding energy crisis and the availability of construction materials, and is accompanied by decent capacity utilization for the first half of the year," said Michal Vacek, CEEC Research's executive director.

According to the survey, 67 percent of the companies surveyed expect a decline this year, with large firms estimating a 2.9 percent drop and medium and small firms estimating a 2.3 percent drop. While the civil engineering sector is estimated to decline by 3.2 percent, the civil engineering sector relies on continued funding of transport construction by public procurers and therefore the forecast for a decline is smaller, at 1.6 percent. Civil engineering includes the construction of roads or telecommunications and energy networks.

"The government is taking a number of steps to stabilise the economic development during this year. One of these stimulants can be considered to be the effort to keep the level of newly announced construction tenders in the transport ministry at a still attractive level, as evidenced by the budget of the State Fund for Transport Infrastructure, which is set at CZK 150.9 billion and exceeds previous budgets in total," said Transport Minister Martin Kupka (ODS).

The capacities of construction companies are 92 percent utilised by mid-2023. According to the analysis, the high utilisation at a time when forecasts are more downwards is due to contracts signed in earlier years or a shortage of labour.

The development of construction companies' sales will also be marked by a decline this year, with an estimate of 1.2 percent. According to the directors of more than 100 construction companies surveyed, a turn for the better is expected next year, in which 54 per cent of the companies expect a slight increase in their revenues.

Source: CEEC Research and CTK