The future of construction may not be good, few permits have been issued

Prague - Despite the positive results of construction production last year, the future of Czech construction may not be very good. Construction authorities issued the fewest building permits last year since statistics began, that is, in the last 27 years. This was reported to ČTK by analysts approached for comments. Experts say the cause is slow permitting processes, but also unsuccessful digitization of the construction process. This year, construction will mainly be driven by infrastructure development, which the government plans to invest in again. However, it will be dampened by insufficient housing construction.

Data published today by the Czech Statistical Office indicates that construction in the Czech Republic increased last year after two years of decline. Its output rose by 9.3 percent year-on-year, after dropping by 1.4 percent the previous year. Both residential and engineering construction contributed to last year's development. In December alone, the year-on-year growth of construction slowed to 5.3 percent from 6.2 percent in November. Month-on-month, production in the sector was up by 1.7 percent,

However, Martin Gürtler, economist at Komerční banka, pointed out that a total of 61,600 building permits were issued last year, which is a year-on-year decrease of 14.5 percent. "The reason is likely largely due to problems with the digitization of the construction process. However, this is not just a one-off fluctuation, but an overall negative trend. The number of building permits issued has steadily decreased over the last four years at a rate of five to ten percent annually," he stated.

According to him, the main hope for construction lies in the revival of investment activity. "Government investments have been growing rapidly, but it is an open question whether they will be slowed down by the change of government and the current budgetary provisional," added Gürtler.

Economist Štěpán Křeček from BHS pointed out that it may also be problematic that companies with 50 or more employees closed only 64,939 domestic contracts in 2025, which represents a year-on-year decrease of 21.4 percent. "Another issue can be identified in the estimated value of permitted constructions in 2025. It reached 503.3 billion crowns, which represents a year-on-year decline of 13.3 percent. A total of 51 projects were approved, with budgets exceeding one billion crowns," added Křeček.

Petr Dufek, economist at Banka Creditas, characterized the results regarding housing construction as a disappointment, as it recorded below-average results last year. In 2025, the construction of 35,819 apartments was initiated, which is a year-on-year decrease of 2.2 percent. According to Dufek, the total number does not meet the demand for housing that currently exists in the Czech Republic. "While a mortgage boom was underway, apartment construction lagged behind. It’s nothing new that the permitting of constructions and the availability of plots is a bottleneck, resulting in slow construction, while prices are rising dramatically," said Dufek.

This year, according to him, engineering construction, that is, the construction of transport or energy facilities, should maintain positive results. However, the lower number of contracts closed last year suggests that this type of construction will grow at a significantly slower pace than last year.